Child Benefit - not willing to pay onto a prepaid card?

StixUK

Hello,


Due to Tesco Bank messing up a lot of our direct debits and causing me a couple months of issues, my wife and I have tackled two problems at once by using a prepaid account that acts identically to a normal bank account, without the obvious protections assured by the government.


We always try to budget and fail and this card does not allow us an overdraft so is better than the accounts where you can still get an unauthorised overdraft and still potentially get into trouble.


I digress.


I managed to change ALL of my direct debits over manually one Saturday, as we have quite a few, and I managed to deal with my income sources as well (inc. tax credits) and I came to the final one, which was the child benefit office (CBO).


This is where my problems began as we are looking to close our bank account and want to use this prepaid card for everything.


The CBO got quite aggressive with me on the phone telling me that they wouldn't make payments onto this card (although it has a sort code and account number) as they had decided that it was not 'safe'.


Their explanation for this was; if we pay into a prepaid account and the money gets lost we cannot help you. Obviously I thought that whether or not it was paid into bank or prepaid account, once the money is received by the institution, the CBO are no longer responsible for the monies sent.


So I argued with them and asked them to give me a valid reason, not to fob me off (the way I felt) and the operator started getting shirty with me until she relented and stated that she would make the change.


Come my normal payday, no money - £244 missing, direct debits perilously close to bouncing.


They admit they owe us the money and state to my wife on the phone that they had tried to process the payment and have "3 people working on it in head office". Wife proceeded to give the Tesco bank details as a temporary option. Payment was paid in today.


My question is:


1. IS anyone else getting their benefits paid onto a prepaid account that accepts these payments (i.e has a sort code and account number) and specifically states that it will accept these payments?


2. If you have, did you receive any objections to it?


Just for reference we have the Cashplus Freedom account.


P.S It is worth noting that the HMRC payments website clearly does not offer an exclusion for prepaid accounts. It does state that it pays into: bank, building society and credit union accounts, but the Cashplus account mimics a bank account in everyway, in such a way that the sender of money wouldn't know the difference if the company name never appeared.

paragon909

If you don't have a normal bank account, You can open a post office cash card to get benefits paid into.

But I know the following cards allow DWP payments in.

https://www.ffrees.co.uk/ - This one issues a free card with no application fees, But you need to enter passport number or driving or any other ID they accept and you have.
http://www.credecard.com/

Both are really cheap, They give you a sort code, account number, And the bank is Natwest. BACS are normally loaded at 8am monday to friday.

System

StixUK wrote: »

It does state that it pays into: bank, building society and credit union accounts,

....
Cashplus account mimics a bank account.

So the Cashplus account is not one types of account listed

NYM

I've never heard of a Cash Plus account so I Googled it...

This link suggests that the Benefits can be paid into it. Benefits paid direct to account

StixUK

!!!!!! wrote: »

So the Cashplus account is not one types of account listed

No it isn't as Cashplus is a prepaid MasterCard but acts exactly like a Basic Bank Account in many ways.


But, the HMRC payments website clearly allows payments into a bank account, which only requires a:


1. Sort Code


and


2. Account Number


This is what the cashplus prepaid account supplies, so therefore it would stand to reason that it comes under a 'bank account' heading.


If I was to pass you my sort code and account number for you to pay me as an employer, you wouldn't be able to differentiate if this was a bank account or prepaid account.

StixUK

NYM wrote: »

I've never heard of a Cash Plus account so I Googled it...

This link suggests that the Benefits can be paid into it. Benefits paid direct to account

You try telling CBO that.


I had this conversation with them on the phone, but it was like banging my head against a brick wall.

StixUK

paragon909 wrote: »

If you don't have a normal bank account, You can open a post office cash card to get benefits paid into.

But I know the following cards allow DWP payments in.

https://www.ffrees.co.uk/ - This one issues a free card with no application fees, But you need to enter passport number or driving or any other ID they accept and you have.
http://www.credecard.com/

Both are really cheap, They give you a sort code, account number, And the bank is Natwest. BACS are normally loaded at 8am monday to friday.

Thanks for the info.


But from what I can see - these two accounts achieve the same objective as the account I have.


Take a look at this link, it explains what the account/card can do.


http://www.mycashplus.co.uk/cashplus-card-uses/default.aspx


Bearing in mind that I am on the Freedom account, so I get completely Free usage of my account and it seems more privileged compare to the standard options on their webpages.

StixUK

I think the biggest hurdle that got in my way was the fact that I mentioned to the operator that I wanted it paid onto a prepaid card, since I mentioned those two words - she went into script mode.


It was like talking to a petulant child. I could explain to my hearts content that she could make the payments on there, she wouldn't listen and in the end just said yes to shut me up.


What annoys me the most is that I am offering a perfectly legitimate option to get my money paid - account number and sort code, and they are being petty and difficult about it.


The excuse they provided about the safety of my money once it has reached the institution is none of their concern IMHO. I feel a bank could just be as ruthless with my money as well and could just as easily get lost by their systems.


There seems to be no physical block to paying the money on there, just a preference by the CBO as to avoid any non-payment claims coming to their head office.


This also doesn't seem like an official policy as none of the HMRC websites excluded prepaid cards as an option to have money paid onto (esp. as I have account number and sort code).


It just grates me when they come up with some kind of lame excuse because it avoids hassle at their end, they don't have that choice, surely?


Am I wrong in thinking that once the money has reached the institution the CBO are no longer liable. They are implying that if it gets lost in a bank, they can do something more than if it gets lost by APS Financial? What are they going to do different? They can't seem to explain this - just reverted back to the word 'safe'.

Anthorn

Re. Opening Post: In fact a +1 for credit unions.


Looking at the OP it is evident that the increasingly trodden path away from banks and building societies towards the alternative financial market is being taken. The difference between credit unions and other prepaid options is that in a credit union everything should be in one place: Savings, Loans and even a Credit Union Prepaid Card which can receive savings from your account or managed independently.


Your problem is Direct Debits and Standing Orders. As I found when I tried to divorce myself from the more mainstream banking and opted for the alternative financial market, it can't be done as economically as free banking and what breaks it is DDs and SOs.


However some credit unions operate jam-jar accounts into which is split your income and paid out usually by bank transfer to whomever you want. Such a jam-jar account could fund a pre-paid account such as a cashplus card which offers DDs as well as any other accounts which can be paid by bank transfer as an alternative to Direct Debit. The jam-jar account is therefore to all intents and purposes a standing order.


The big advantage to credit unions is loan interest. Still big at up to 3% per month (around 43% APR) but a lot less than the usual route in the alternative financial market of pay-day loans and doorstep lenders. The longer you pay in to a credit union but not necessarily maintain much of a credit balance the cheaper the interest should get.


Overall, I'd say check out your local credit union and possibly pair it with a cashplus card but avoid the high interest short-term loans that cashplus offers.


Please note that not all credit unions offer the services I've mentioned but all of them should be working towards a full service.
http://www.abcul.org/home