Lloyds TSB took my mortgage payment a day early, is this right?

jennie-flower

My mortgage payment is due tomorrow, 5th November 2007.

I had a day out christmas shopping today then went for a meal to a really nice restaurant. I went to pay with my card at the end of the meal only to have my card declined.

I rushed home and checked my internet banking balance this afternoon (about 3pm)only to find that the bank has taken my mortgage payment today, even though the transaction is dated 5th November 2007 on the statement and it's only the 4th November today. I was about £50 short of paying the mortgage so have gone overdrawn. My plan was to top my account up tonight from my savings account so the mortgage money would have been in the account in time for tomorrow.

Can the bank rightfully do this? I called them and they said it was standard procedure. Surely it's not right to take the payment a day early?

Basically my card was declined in a posh restaurant because of a direct debit that's due to leave my account until tomorrow!

Homework

HBOS does the same, it's just how they work.

taless

I'm sorry to hear what has happened, but that is how LTSB works.

The rule is that you must ensure that you have cleared funds the WORKING day before the payment is due. So you'll have to transfer funds from your savings account on Friday, if your payment's due on Monday.

I am not sure if LTSB did allow your mortgage payment to go through. If they did (by increasing your unplanned overdraft), as long as you transfer your funds from your savings by 3.30pm on Monday, you won't incur any charges - their new grace period.

However, if the mortgage payment did not go through and was returned, I suspect you'll be charged £30. But I believe if you talk to them nicely at the branch, they may well refund the charge.

All the best!

jonesMUFCforever

jennie-flower wrote: »

My mortgage payment is due tomorrow, 5th November 2007.

I had a day out christmas shopping today then went for a meal to a really nice restaurant. I went to pay with my card at the end of the meal only to have my card declined.

I rushed home and checked my internet banking balance this afternoon (about 3pm)only to find that the bank has taken my mortgage payment today, even though the transaction is dated 5th November 2007 on the statement and it's only the 4th November today. I was about £50 short of paying the mortgage so have gone overdrawn. My plan was to top my account up tonight from my savings account so the mortgage money would have been in the account in time for tomorrow.

Can the bank rightfully do this? I called them and they said it was standard procedure. Surely it's not right to take the payment a day early?

Basically my card was declined in a posh restaurant because of a direct debit that's due to leave my account until tomorrow!

They have not taken the money out merely earmarked it for tomorrow to stop you spending it.
If the card had been approved for the meal then I suppose you would have been on here tomorrow complaining about overdraft charges.

Smidda

They wouldnt have returned the d/d becuase as mentoioned you have till 3.30pm to pay in and then a decision is made as to return item or chg for unplanned o/d

YorkshireBoy

taless wrote: »

...as long as you transfer your funds from your savings by 3.30pm on Monday, you won't incur any charges - their new grace period.

Is this the 'grace period' that only came into operation last Friday 2nd November? If so, it sounds like the OP has been very lucky indeed!

mrmajika

YorkshireBoy wrote: »

Is this the 'grace period' that only came into operation last Friday 2nd November? If so, it sounds like the OP has been very lucky indeed!

Yes it is.


The funds always debit shortly after 12noon on Sundays and 10:30pm on weekdays evenings as per the T&Cs of the account.

There is no such thing as earmarkings of direct debit funds.

Conversely, payments due also credit the accounts early.

jonesMUFCforever

If that is so why does it show as Monday's date?
Why was the card declined if earmarking had not taken place?

vix2000

have had this discussion on here before but i still think it stinks and, like the OP had assumed, as long as she had the funds in by midnight it should be ok. if they can take the funds at weekends then surely you can pay it in weekends, its all done real time anyway. If she paid money in at 11.59 pm she could draw it out at 12.00. whats the difference?


'They have not taken the money out merely earmarked it for tomorrow to stop you spending it.
If the card had been approved for the meal then I suppose you would have been on here tomorrow complaining about overdraft charges.'


Who gave them the right to stop the op spending their own money?

mrmajika

ejones999 wrote: »

If that is so why does it show as Monday's date?
Why was the card declined if earmarking had not taken place?

Earmarking ocurrs when you use your card in a store and the funds are reserved for when the visa debit cycle completes. The actual account balance is not affected but the available balance is reduced because of the earmark.

The direct debit and standing order processes work differently. LTSB run their batch processing (known as unconsolidated mode) at 10:30pm each weekday evening (apart from a Friday) and at 12noon on a Sunday. The process lasts for approximately 2 hours.

During this time, any due funds for the following day credit the account. The funds are there and are immediately available. Similarly, funds due to debit the following day are taken from the account, affecting both the actual and available balance.

As such, by around 2:30pm on a Sunday direct debit and standing order funds have left the account dated as the next working day on the account statement.

Hope all that makes sense, and helps !:beer: