Halifax's (Clarity) new DD policy

bd10

Hi all,

Halifax changed their direct debit policy starting soon. They will no longer adjust the direct debit amount for any manual payments made earlier. This applies even if the DD instructions are to pay the balance in full. This makes no sense to me, why would they do that? I spoke with one of their customer advisors and was told that the only way around this is to cancel the DD instructions. I could understand if these new T&C were not applicable if less than the full balance is taken by DD.
So I cancelled the DD for the time being and go back to manual payments. Are they perhaps trying to discourage card holders to make payments during the month? I for one may not be their most popular client as they only made 4p on a €100 cash withdrawal abroad last month and always pay the balance in full. But they collect plenty of swipe fees on my account. Just weird or am I missing something?

[Deleted User]

I wouldn't say you're weird but you're missing the complaints that people were making.

They're trying to enable people to pay off faster if that's what they want to do.

Many people complained that when they made additional payments, it made little difference as the DD was reduced by the same amount.

chattychappy

DDs are archaic. They go back to the pre-online days and were meant as an alternative to people putting cheques in envelopes and sending them off.

They are not particularly secure - they are based on trust. In taking on a product/service, you can put down pretty much anybody's bank details. It relies on that other person to spot something unauthorised.

Then there's the whole business of a merchant having to call for the money and the transaction going through a day or so later. They have to tell you in advance of anything that is to be taken - a "protection" which often means people get caught out because they miss the first payment of a promo offer.

In the world of internet, faster payments etc., a new payment mechanism is needed for people that are worried they might "forget". Something interactive, perhaps. But until then, like it or lump it I suppose.

I avoid DDs. With Clarity, I pay manually a few days after an ATM transaction.

bd10

I hear you, but why did Halifax then say this new rule will not apply if the DD is set for the full amount? That's the part I find illogical. They should have excluded it. I told the client rep on the phone but he didn't get it. Well, looks like I'll be juggling with manual payments in months of travelling before putting a new DD back in place.

Chino

chattychappy wrote: »

In the world of internet, faster payments etc., a new payment mechanism is needed for people that are worried they might "forget".

Like direct debits, perhaps?

Yes, let's invent a new solution for a problem that was solved decades ago.

[Deleted User]

Likely because people use the card to withdraw cash abroad and are charged interest straight away. So people then made an immediate payment to their card to reduce any interest.

Vortigern

If a DD puts your account into credit, Halifax would have to refund the credit amount, on demand and without charge?

bd10

The card rep said I would have to contact them so that they can wire the funds back to my current account (different bank), oh and I should make sure that I have the funds in my account.
That is just stupid, makes absolutely no sense unless they want customers cancel their DDs. Now when I log in, I am getting the warning about potentially missing payments. ... lol.

dazzaofdagenham

I quite like this idea....got a text from them today...

I have my account set up for minimum payment, but I like to pay extra throughout the month if I’ve been spending etc...

So not affecting the direct debit is a winner for me.....

Vortigern

I wonder if Halifax realise that this provides a way of pre-loading a card, without breaking their rules, before foreign cash withdrawals?

• Do normal monthly spend on the card
• Pay in full before the DD date
• DD also takes full payment creating a credit balance

SnowTiger

Vortigern wrote: »

I wonder if Halifax realise that this provides a way of pre-loading a card, without breaking their rules, before foreign cash withdrawals?

• Do normal monthly spend on the card
• Pay in full before the DD date
• DD also takes full payment creating a credit balance

It's already possible to do that if you make a payment a day or two before the direct debit is taken. That's because there isn't enough time for them to reduce or stop it.

I guess this new procedure is being introduced to make it easier for Joe Public to understand. There's now one rule and it's very simple: the direct debit will always be collected.

Take my Halifax statements as an example.

August's contains this:

'Your Direct Debit payment of £5.00 will be collected from your current account on 30/08/18. One-off payments received 2 clear working days before the day your payment is due will reduce or stop the Direct Debit from leaving your account for that month.'

September's contains this:

'Your Direct Debit payment of £12.62 will be collected from your current account on 28/09/18.'

With the new rules about persistent debt coming in to force, Halifax wants to make sure additional payments are treated as such.