Direct Debits taken before credits credited

anansi69

Sorry for cryptic title but I am SO ANNOYED :mad: Just found out that companies take the direct debits out of your account at one minute past midnight. Whereas any credits due aren't credited until the morning. Did anyone else know this??

I've just been charged £59 by Alliance & Leicester because of this hidden problem. I had £99 in my account, and the next day a direct debit of £100 was due out. On the same day a credit was due for £100, so (naively) I thought I'd be OK.

OH NO I wasn't. They 'bounced' the direct debit & charged me.

Am I alone in feeling this is unfair? Am I alone in knowing NOTHING about this set up? The 'help' line person talked to me as if it was the most obvious thing ever.

Now I have challenged the charge I am being told nothing can happen until the test court case is resolved. :mad:

jonesMUFCforever

The money should be in your account one working day before payments go out. If this was the case there would have been no charges.

YorkshireBoy

Not all banks do this. For example, my own bank (Yorkshire) don't.

Why sail so close to the wind? If you really must, then get yourself an overdraft facility to cover such situations. You won't incur any interest, but they'll 'technically' use it to cover the payment out should they process debits before credits.

Finally, they do warn you of this in the T&C's...

20. Order of Transactions

20.1 We do not have to carry out transactions on Your Account in any particular order.

http://www.alliance-leicester.co.uk/currentaccounts/ec03964.pdf

anansi69

ejones999 wrote: »

The money should be in your account one working day before payments go out. If this was the case there would have been no charges.

Hmmm, yes, I'll certainly know that for next time. I can't say it's something I have ever come across (or had knowlege of) before. I suppose it's just me being lucky in my 20-odd years of banking, never to have had this problem

anansi69

YorkshireBoy wrote: »

Not all banks do this. For example, my own bank (Yorkshire) don't.

Why sail so close to the wind? If you really must, then get yourself an overdraft facility to cover such situations. You won't incur any interest, but they'll 'technically' use it to cover the payment out should they process debits before credits.

Finally, they do warn you of this in the T&C's...

http://www.alliance-leicester.co.uk/currentaccounts/ec03964.pdf

I would love an overdraft, but they won't give me one, as I don't work at the moment. Unfortunately this situation means that sailing close to the wind is one necessity of life I cannot really help.

Thank you for showing me the T&Cs though. At least I knwo they didn't just make it up on the spot

gt94sss2

anansi69 wrote: »

Sorry for cryptic title but I am SO ANNOYED :mad: Just found out that companies take the direct debits out of your account at one minute past midnight. Whereas any credits due aren't credited until the morning. Did anyone else know this??

As has been said, most banks state that account must have sufficient money in it, the day before payments go out - and all banks tend to take debits before credits..

However, some banks (including HSBC) will not impose any charges as long as the balance at the end of the day is in credit..

Regards
Sunil

anansi69

Thanks for all the responses. I think I may be moving my business to a more amenable bank. I'll check out the HSBC & Yorkshire- thanks for the tips.

jonesMUFCforever

You may move your account from bank A to B and on to C etc but it will always boil down to one thing - if you don't want to be charged you have to take responsibility to make sure that funds are in the account in time.

anansi69

ejones999 wrote: »

You may move your account from bank A to B and on to C etc but it will always boil down to one thing - if you don't want to be charged you have to take responsibility to make sure that funds are in the account in time.

I am VERY responsible, & have ALWAYS made sure that sufficient funds are in my account in time. My issue here is not being told what constitutes 'in time'. If a DD is due out on the 2nd of the month I was unaware that funds needed to be there on the 1st of the month.

Faz

I had this problem once too, I assumed that providing I put the money in during that day, they would cover the DD. First time such a thing happened to me, and when I called up Natwest and told them to check their records it was indeed my first ever such charge and therefore they agreed to refund the charge. Try it from this angle instead of the 'your charges are unlawful' and if you're nice they may budge? I've now learnt to make sure the money is in my account the day before.

frepol

If this hasn't happened before, have you tried asking nicely to get the charges refunded?