Is my Bank breaching my confientiality?

edited 30 November -1 at 1:00AM in Budgeting & Bank Accounts
9 replies 1.7K views
KilterKilter Forumite
1 Post
edited 30 November -1 at 1:00AM in Budgeting & Bank Accounts
Recently I made a Direct Debit Indemnity Claim for 6 erroneous direct debits from my current account from Dec 2013 onwards.

The bank, SMILE, refused honour the DD Indemnity stating I must provide the original Direct Debit Instruction and evidence the payments were wrong.

I contacted BACS and they said the bank does not need me to 'prove' anything and I should insist they comply with the indemnity.

There is a litigious situation with the Originator of the Direct Debit and they are non complaint, which is why I have taken this route.

Today the bank took it upon themselves, without my permission or knowledge to telephone the Originator to discuss the matter.

I am flabbergasted! Can they do that? Can they telephone third parties to discuss your affairs without permission?

The Originator was as uncooperative with them as they are me, but I just feel the bank has acted out of it's jurisdiction and may well have breached data protection/privacy/ethical rules etc.

Can anyone advise?

Replies

  • buglawtonbuglawton Forumite
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    Deep in the Ts&Cs you signed up to with Smile it's probably allowed.
  • colstencolsten Forumite
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    The Direct Debit Guarantee covers you if either the bank or the originator makes an error in how and/or when you get charged. You probably provided the bank with an explanation of the error, and they would have the right to discuss this with the originator as the bank would want to recover the money from the originator.

    If you are dissatisfied with how the bank handled your request, you can raise a formal complaint. The Bank have 8 weeks to respond to your complaint and if you remain dissatisfied, you can as the FOS for a final decision.
  • agrinnallagrinnall
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    Have Smile already refunded you? The terms of the DD Guarantee are quite clear that an immediate refund must be made.

    However, having done so, it makes financial sense for them to then pursue the originator for the amount that they have paid you, and I don't really see any reason why they should seek your permission to do so, or even inform you that they are taking that step.
  • gycraig_2gycraig_2 Forumite
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    So you expect your bank to just give you all that money and take it as a loss without even talking to the other company ?
  • jonesMUFCforeverjonesMUFCforever Forumite
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    agrinnall wrote: »
    Have Smile already refunded you? The terms of the DD Guarantee are quite clear that an immediate refund must be made.

    However, having done so, it makes financial sense for them to then pursue the originator for the amount that they have paid you, and I don't really see any reason why they should seek your permission to do so, or even inform you that they are taking that step.

    It also states that in the event of the indemnity claim being refused the bank has the right to debit back the account.
    To do this or resolve the complaint they must surely discuss this with the company?
    The bank have done nothing wrong IMO.
  • chambtachambta Forumite
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    Why is there an issue with them trying to resolve this on your behalf?
  • ArmoricaArmorica Forumite
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    Under the guarantee/PSD, your bank owes you an immediate refund and the burden of proof is on them. However, if they suspect a fraudulent claim, they may elect to take the legal risk and refuse a refund.

    Your litigiousness with the originator may be irrelevant. Read the guarantee carefully - if you signed the original mandate and the amounts were notified to you, they have not breached the guarantee. The guarantee is for payment errors. It doesn't strictly extend to wider 'quality of service' issues as for credit cards, for example.

    Your bank will claim from the originators bank. The company you dealt with is a customer of a bank - and they are entirely within their rights to claim back from the originator. (It's not clear, and you may not know, if your bank is also the originator's bank)

    By making a claim under the guarantee, you've kinda made it the business of the banks...
  • jamesdjamesd Forumite
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    buglawton wrote: »
    Deep in the Ts&Cs you signed up to with Smile it's probably allowed.
    Ultimately it's irrelevant whether their terms allow it or not. The Financial Ombudsman Service rules that industry-wide schemes like the Direct Debit Guarantee take precedence over individual bank terms and conditions.

    Smile has reversed the standard of proof. It's the originator of the DD that has to provide the evidence, not you. It is fine for Smile to discuss with them and it is good news that they have not been cooperative with Smile, since that will tend to suggest that they know that they are in the wrong.

    It is worth noting that the DD Guarantee only covers things like false DD claims or wrong amounts and similar lacks of authorisation. If you just didn't like the service that would not be enough to make the DD unauthorised.
  • societys_childsocietys_child Forumite
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    If you just didn't like the service that would not be enough to make the DD unauthorised.
    It does appear that the op is maybe trying to miss-use the guarantee to solve other issues.

    There is a litigious situation with the Originator of the Direct Debit and they are non complaint, which is why I have taken this route.
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