wrong amount taken by Direct debit

nursek

Hi I have a bit of a query. I took out a new mortagage in december. The first payment due turned out to be almost 2 payments and couldnt afford it,. Arranged with Mort co. to pay back in increments and this was no problem. I finally paid the final difference by April plus that months mort payment. This has all been done by direct debit and organised by the mort co. In May all the money for the mortgage was in the bank account (£830) but the mort co only called a direct debit for £193. I didn't think that this was a problem at the time as i had paid all the monies owed and thought that this was a readjustment figure. I got a letter a few days later advising that we now owed the mort co £637 . I rang and queried this and was told that I should not worry about it and that it would be passed onto arrears to sort out.
I have suvbesequently received asecond letter just yesterday adivising of the deficit. Having rung the mort co. I have been told that it was my fault that this happened even though the direct debit was set by the company.

Oakies so firstly if i owe the money then i owe the money but how do I stand in terms of the error being made in the first instance and can i insist that if this is their fault in terms of the mandate being incorrect, that they do not put this as an arrears on my credit history. Plus how does the direct debit guarantee work in this situation.

I have been asked to pay the deficit back in installments which is ok but yet again i am in the red with them. Before you ask the money in the bank went on other outstanding bills and wasn't just frittered away!

Sorry this is a bit long winded
hope some of you can offer a bit of advice. Thanks

dunstonh

The first payment due turned out to be almost 2 payments and couldnt afford it,.

That is normal with many lenders as you pay for the month ahead plus the amount from the point the money was lent. That is why many mortgage advisers will let you know in advance the best time in the month to move with the recommended lender.

In May all the money for the mortgage was in the bank account (£830) but the mort co only called a direct debit for £193. I didn't think that this was a problem at the time as i had paid all the monies owed and thought that this was a readjustment figure. I got a letter a few days later advising that we now owed the mort co £637 . I rang and queried this and was told that I should not worry about it and that it would be passed onto arrears to sort out.

So, it sounds like they have told you not to worry whilst they look into the error.

I have suvbesequently received asecond letter just yesterday adivising of the deficit. Having rung the mort co. I have been told that it was my fault that this happened even though the direct debit was set by the company.

The direct debit may have been incorrect but you still owe the money. Unfortunatly, the error is still yours as you placed yourself in arrears from the very first payment. Luckily, your lender was sympathetic to you.

Oakies so firstly if i owe the money then i owe the money but how do I stand in terms of the error being made in the first instance and can i insist that if this is their fault in terms of the mandate being incorrect, that they do not put this as an arrears on my credit history.

THe first instance is your error by not having enough money to meet the mortgage payment. Everything else has happened from there. If you had all the money in May to make the correct amount, why can you not pay it now?

Plus how does the direct debit guarantee work in this situation.

It doesnt as there has been no overpayment or unknown collection.

I have been asked to pay the deficit back in installments which is ok but yet again i am in the red with them. Before you ask the money in the bank went on other outstanding bills and wasn't just frittered away!

Ahh, that answers the above but if you knew you owed it, perhaps you should have held it back. The mortgage is the most important liability you have and the one that should be paid before all others (apart from perhaps the taxman).

At the end of the day, there appears to be some confusion on the direct debit but you would have been notified of the payment amounts at the start (which is no doubt why you queried the initial payment). You are in arrears and it is your own fault you are in arrears. Whilst the direct debit issue hasnt helped, that is not the reason for the arrears. Its quite possible that you were already showing as being in arrears from the very first payment on your credit history. It really depends on whether the lender shows it or not. A lot of the time, it is automated.

Whilst I do have sympathy for your situation, I am alarmed that you managed to get into arrears on your very first payment and I suggest you really cut your spending down to the bone and build up a reserve as soon as you can. You may wish to take a vist to the Debt Free Wannabe section as you do appear to have credit issues which some of the posters in that section may be able to help you with. Try an nip it in the bud before it becomes a real issue. Especially with another 1 or 2 interest rate rises on the cards.