Direct Debits

Spectrum1

With regards to direct debits.Am I being stupid in thinking that when I sign a DD mandate to come out of my account on the 1st of each month,that i should be allowed to lodge the money into my account on the 1st,and not as requested by my bank the day before,

Stokey125

Spectrum1 wrote: »

With regards to direct debits.Am I being stupid in thinking that when I sign a DD mandate to come out of my account on the 1st of each month,that i should be allowed to lodge the money into my account on the 1st,and not as requested by my bank the day before,

I would have said yes but then I am not a bank manager. The question of whether a bank can legally take the money the day before the debit is due is debatable and is one which I do not believe has been tested in any court.

bengal-stripe

Direct Debits go through in the very early hours of the morning. They all queue up behind the door and are ushered in at a certain time, long before ‘banking hours’. (My bank, Abbey, has just changed their system. Now, all the booking of the day appear right after midnight, it used to be 3 or 4 in the morning.)

At this point, assuming there was not enough money available, the bank would have to decide whether they pay or bounce the transaction. DD do not go through at ’close of business’.

Mark7799

Banks make it quite explicit in their terms and conditions that they expect funds to be in accounts before payments by direct debit are requested by originators.

Stokey125

Mark7799 wrote: »

Banks make it quite explicit in their terms and conditions that they expect funds to be in accounts before payments by direct debit are requested by originators.

Mark - While the banks make it explicit in thier terms and conditions now that they expect funds to be in accounts before payments by direct debits are requested is not with respect the point the instruction on the direct debit is to make the payment on a particular day. Therefore if funds are in the account on the day the payment is due can the bank refuse to comply with the instruction to pay the direct debit. While it may be more convenient for the bank to make the payment in the early hours of the morning of the day the payment is due it is equally possible to do the payment at 11pm on the day the payment is due in case funds are recieved during the day.

Mark7799

But with a direct debit the Bank doesn't make the payment - the beneficiary claims it.