OD Problems. Under 16!

dickibobboy

Right sorry for this but let me explain

My son has his bank account with Natest, Under 16. This has been fine.

He has it set up with paypal so he can pay for things through it...

He bought two items through ebay, Comming to the total of around £16,

He wasnt sure if the amount was in the account but i said try it and if its not then it will say 'payment could not be completed' as it has done in the past and so on..
but it didnt, it went through fine and the items arrived, Then about i week later a email comes from paypal saying that they payment has been declined!
So i logon the paypal account and it says -£16! I didn't know you could over draw paypal? it shouldnt go through if you dont have the funds...

So this was the other day,

The bank statement came today and it says the account is OVERDRWAN £108! F**K!

I thought these accounts couldnt over draw and it has been fine for the last 1 1/2 years or so.

The payments all seem to be with paypal (i forgot to mention, A payment of 25p was made from paypal for something, although this was before the minus numbers, just after the items paid for.)

Looking at it i dont understand and i am going to ring the bank and paypal tomorrow and see whats going on and go into the branch on saturday with my Son.

Thanks for reading.

angeleeyes

paypal have moved to luxumbourg now.... they won't bat an eyelid...

Good luck!

Iamthesmartestmanalive

You must be proud of the example your setting your son

Dont know whats in your bank account? ahh try it anyway

Its not even like he was a few pound short, more like a hundred

Maybe you should think of teaching your son to be responsible and keeping control of his money from now on as opposed to telling him stupid practices which could damage his finances once he is old enough

virgin_moneysaver

when your son signed for the account it was in the T & C that if he set up the D/D's the money to cover these must be in the account before the d/d was presented, the very latest date that the cash would have to be in was the working day before - if no funds are there then yes, the bank will return the d/d & a the published charge would be levied - now as your son is under 18 the bank will refund this but they will also cancel the d/d so your son will no longer be able to use paypal

he need to understand this now as if this happened when he's 18, they will not refund & also if he tried to get accounts elsewhere & they see his present bank statements with payments returned on them they won't touch him with a bargepole, so his future creditworthiness would be affected as its marked on his credit record that payments have been missed

as far as the account being unable to go overdrawn - there is a difference between having an authorised o/d which these accounts can't have because they're designed for minors & causing an account to go overdrawn by trying to make payments when the funds aren't there - basically, with a card payment, it's down to the individual retailer & their floor limit on how much they'll accept without checking the account. The other scenario is that the payment is auth by retailer as you have the money at the point of sale but by the time the debit reaches the account the account holder has taken that money out for something else & they go o/d

The buck stops with the account holder - they must have the funds in the account BEFORE making any type of payment from the account

The bank should refund & hope your son learns his lesson otherwise he's gonna get into all sorts of financial difficulties when he's older

Debt_Free_Chick

dickibobboy wrote: »

The payments all seem to be with paypal (i forgot to mention, A payment of 25p was made from paypal for something, although this was before the minus numbers, just after the items paid for.)

These are bank charges - £38 for each unpaid item.

The unpaid items appear to be direct debits to Paypal - it looks like he's set up a direct debit so that money is automatically transferred from his NatWest account to his Paypal account. However, when the DDs have been requested, the bank's declined them and then charged his account.

He needs to go into his Paypal account and cancel the funds transfer/DD. To be safe, cancel it with NatWest too.

Separately, he may be able to reclaim the charges as unfair amounts - see the separate board for that one.

BTW - he should have had an email from Paypal confirming that they were going to take the DD from his account - did he?

dickibobboy

Iamthesmartestmanalive wrote: »

You must be proud of the example your setting your son

Dont know whats in your bank account? ahh try it anyway

Its not even like he was a few pound short, more like a hundred

Maybe you should think of teaching your son to be responsible and keeping control of his money from now on as opposed to telling him stupid practices which could damage his finances once he is old enough

I wasn't asking how i should teach my son.

The only reason i did tell him to try was because normally it would say payment could not be completed.

Also i don't know if you understood or not but the payments that was made were only for £6 and £9 not hundreds.

BlightyAndy

Online Banking would have helped here... He could've checked his balance and last transactions.

But NatWest's a little selfish and doesn't let U16's.

Debt_Free_Chick

dickibobboy wrote: »

The only reason i did tell him to try was because normally it would say payment could not be completed.

Don't rely on that for the future. You'll find in the T&Cs that the bank is under no obligation to refuse the payment. If it goes through, then it's entirely down to your son to make sure there are sufficient funds.

It might be better to introduce him to some basic budgetting so he begins to understand when to put transactions through his bank account and when not to. Might even be time to get him into something like MS Money or another money-management package

dickibobboy

virgin_moneysaver wrote: »

when your son signed for the account it was in the T & C that if he set up the D/D's the money to cover these must be in the account before the d/d was presented, the very latest date that the cash would have to be in was the working day before - if no funds are there then yes, the bank will return the d/d & a the published charge would be levied - now as your son is under 18 the bank will refund this but they will also cancel the d/d so your son will no longer be able to use paypal

he need to understand this now as if this happened when he's 18, they will not refund & also if he tried to get accounts elsewhere & they see his present bank statements with payments returned on them they won't touch him with a bargepole, so his future creditworthiness would be affected as its marked on his credit record that payments have been missed

as far as the account being unable to go overdrawn - there is a difference between having an authorised o/d which these accounts can't have because they're designed for minors & causing an account to go overdrawn by trying to make payments when the funds aren't there - basically, with a card payment, it's down to the individual retailer & their floor limit on how much they'll accept without checking the account. The other scenario is that the payment is auth by retailer as you have the money at the point of sale but by the time the debit reaches the account the account holder has taken that money out for something else & they go o/d

The buck stops with the account holder - they must have the funds in the account BEFORE making any type of payment from the account

The bank should refund & hope your son learns his lesson otherwise he's gonna get into all sorts of financial difficulties when he's older

Thankyou for the information, It will be checked in future but i just thought it would be like the other times and it would say the payment cannot be completed but this time it didnt.


Who should i contact with this? The bank account or paypal?

I was thinking of restoring the paypal balance by sending money from mine to his but im not sure if i should yet? or will it be fine to go ahead even though there is still this O/D to do with them.

the only email that was recieved (one for each item) was

Dear Adam Dickinson,

On 30 Sep. 2007, you attempted to transfer 9.25 GBP from your bank account,
ending in 4371.

Your bank declined the transfer due to insufficient funds.

PayPal will automatically resubmit this transfer to your bank in three working
days. Please deposit funds into your account to cover the amount of this
transaction.

You indicated when you opened your PayPal account that you had read and agreed
to the terms contained in our User Agreement, which states: "PayPal reserves the
right to resubmit for collection any debit authorised by you (Instant Bank
Transfer, eCheque or Add Funds) that is returned for insufficient or uncollected
funds".

dickibobboy

AndyGrayUK wrote: »

Online Banking would have helped here... He could've checked his balance and last transactions.

But NatWest's a little selfish and doesn't let U16's.

Don't rely on that for the future. You'll find in the T&Cs that the bank is under no obligation to refuse the payment. If it goes through, then it's entirely down to your son to make sure there are sufficient funds.

It might be better to introduce him to some basic budgetting so he begins to understand when to put transactions through his bank account and when not to. Might even be time to get him into something like MS Money or another money-management package

He will be 16 soon so i think online banking is going to be a big help and it will be checked when needed to before payment etc..

deepandcalm

The problem here is that PayPal have switched the way that they take money for your account and not made it 100% clear unless you read carefully.

If you want to be more careful, remove the direct bank funding option from your preferred payment method.

What happens is (AFAIK)... you purchase something .. Paypal attempt to get an authorisation from your card when they get it they kick off a direct debit to actually get the money. Now in a perfect world that money should be frozen anyway and the funds are going to be available. However if your bank lets you spend the money inbetween time or its a tiny amount there is a risk that the authorisation was given without the funds being available.

So along somes the direct debit and trys to take the money and wham you get a returned payment charge. This is all about saving paypal money for card transactions so I would just ditch this funding option and then you will not run into this problem again.

Hope this helps