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Cancellation of Direct Debit by Partner in error
pani_2981
Posts: 2 Newbie
Hi There,
Posting here for the first time and need some genuine advice to help my case
Both me and my husband had individual credit cards in each of our names with the same bank and both our individual direct debit set up was from the joint current account with the same bank as the credit cards. However in Mar/Apr 2018, the direct debit set up for my credit card payment was cancelled inadvertently by the husband thinking that he was cancelling his direct debit instruction as he had closed his credit card. I had no knowledge of this cancellation and was still under the impression that my direct debit set up was still active. My husband also did not know this error had occurred as he was under the impression that he had cancelled his direct debit instruction. I did not receive any formal notification from my bank that my direct debit instruction was cancelled.
As a result, payments on my credit card were not being taken and were showing in default month on month. My credit card statements were coming with a late payment fee, but it did not occur to me at the time that my direct debit was cancelled as I least expected this situation and my father's ill-heath kept me pre-occupied. This surely is not an excuse, but fact of what really transpired during the time. I finally made the payment in Jul 2018 when it was apparently clear that something was going wrong. I settled the outstanding amount of £48 without further questioning it. This has caused the missed payments to show on my credit file which is affecting my applications for new credit. My father was not well during the same period and as a result I had to travel to and fro to my home country several times, hence could not pay too much attention to the issue going on. He eventually passed away in Aug 2018 which further caused delays in me investigating the reason for the direct debit cancellation. This was a genuine human error and it surfaced now as I got rejected for a credit card card application in Feb 2019 with the same bank. My credit card rating was 999 when I applied for the new credit card, however was amazing shocked to see that I was rejected for the application. Hence this caused the reason for me to investigate further the reason for rejection of the application as the missed payments are reflecting in my credit profile.
I wrote to the complaints team in the bank and explained the case to them, but they have rejected my complaint stating that the credit statement statement was reflecting that the payment method collection was to pay rather than collection via direct debit in the subsequent statements after the direct debit was cancelled. This they claim as a notification of direct debit cancellation. I did not buy this reasoning as I strongly believe an independent notice should be sent with respect to any changes to direct debit set up, especially if its a case of direct debit cancellation. Pls correct my understanding if otherwise.
Need some advise if i hv any case in further taking this up with the financial Ombudsman or am I fighting a losing battle? I feel like I am a victim of an action in which I had no involvement in at all and with no direct notifications sent to me regarding the same. Also do banks or financial institutions have any rules they need to follow with respect to notifications for direct debit set ups/amendments/cancelations?
Appreciate if you could advise what best can be done to assist me in removing the missed payments from my credit file or getting some sort of justification against those missed payments for lenders to understand the background to those missed payments. I have been a good client of the bank for several years now, but somehow that does not seem to make any difference to them along with my explanation of the case.
Can the credit agency help me if I explained the case to them, I believe they will take further action only if they received some case insights from the bank, I may be wrong, but some advise here would help as well.
Posting here for the first time and need some genuine advice to help my case
Both me and my husband had individual credit cards in each of our names with the same bank and both our individual direct debit set up was from the joint current account with the same bank as the credit cards. However in Mar/Apr 2018, the direct debit set up for my credit card payment was cancelled inadvertently by the husband thinking that he was cancelling his direct debit instruction as he had closed his credit card. I had no knowledge of this cancellation and was still under the impression that my direct debit set up was still active. My husband also did not know this error had occurred as he was under the impression that he had cancelled his direct debit instruction. I did not receive any formal notification from my bank that my direct debit instruction was cancelled.
As a result, payments on my credit card were not being taken and were showing in default month on month. My credit card statements were coming with a late payment fee, but it did not occur to me at the time that my direct debit was cancelled as I least expected this situation and my father's ill-heath kept me pre-occupied. This surely is not an excuse, but fact of what really transpired during the time. I finally made the payment in Jul 2018 when it was apparently clear that something was going wrong. I settled the outstanding amount of £48 without further questioning it. This has caused the missed payments to show on my credit file which is affecting my applications for new credit. My father was not well during the same period and as a result I had to travel to and fro to my home country several times, hence could not pay too much attention to the issue going on. He eventually passed away in Aug 2018 which further caused delays in me investigating the reason for the direct debit cancellation. This was a genuine human error and it surfaced now as I got rejected for a credit card card application in Feb 2019 with the same bank. My credit card rating was 999 when I applied for the new credit card, however was amazing shocked to see that I was rejected for the application. Hence this caused the reason for me to investigate further the reason for rejection of the application as the missed payments are reflecting in my credit profile.
I wrote to the complaints team in the bank and explained the case to them, but they have rejected my complaint stating that the credit statement statement was reflecting that the payment method collection was to pay rather than collection via direct debit in the subsequent statements after the direct debit was cancelled. This they claim as a notification of direct debit cancellation. I did not buy this reasoning as I strongly believe an independent notice should be sent with respect to any changes to direct debit set up, especially if its a case of direct debit cancellation. Pls correct my understanding if otherwise.
Need some advise if i hv any case in further taking this up with the financial Ombudsman or am I fighting a losing battle? I feel like I am a victim of an action in which I had no involvement in at all and with no direct notifications sent to me regarding the same. Also do banks or financial institutions have any rules they need to follow with respect to notifications for direct debit set ups/amendments/cancelations?
Appreciate if you could advise what best can be done to assist me in removing the missed payments from my credit file or getting some sort of justification against those missed payments for lenders to understand the background to those missed payments. I have been a good client of the bank for several years now, but somehow that does not seem to make any difference to them along with my explanation of the case.
Can the credit agency help me if I explained the case to them, I believe they will take further action only if they received some case insights from the bank, I may be wrong, but some advise here would help as well.
0
Comments
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You don't really have a case. Payments to the account were stopped, and the statements reflected that.
The good news is that time will help minimise the damage to your credit file. Just make sure you stay on top of payments going forward and alwys check your statements for any anomalies.0 -
Way too long a story for which is basically summed up in your heading.
Why would you expect your bank to tell you a direct debit had been cancelled by one of the account holders? It doesn't happen whrn you cancel a direct debit.
They are obliged to report the facts to the credit reference agencies which are your payments were made late. Only one person to blame here I'm afraid.0 -
Thank you for your feedback, do we know on an average what's the timeframe by when the missed payments will be given less importance by lenders. If I have had a clean file from then on.
Will it affect me in getting a car finance in Sep this year?0 -
Car finance is relatively easy to get.
Every month you stay clean will improve matters.0 -
Yet again a problem caused by people cancelling direct debits. I will repeat again. It is NOT necessary to cancel a direct debit when you close a credit card or other account; it will cancel itself in time. I cannot recall even one singlet thread on the subject of a credit card company taking a direct debit for a closed account or when the balance was zero but so many threads about the problems caused by people cancelling direct debits.
You are responsible for checking your statements. It almost defies belief that you failed to notice that no payment was being made month after month to the credit card account.
I am also confused by the fact that after 4 months of non-payment the amount owing was only £48 which is the equivalent of 4 late payment fees. What about the existing balance?0 -
Yet again a problem caused by people cancelling direct debits. I will repeat again. It is NOT necessary to cancel a direct debit when you close a credit card or other account; it will cancel itself in time. I cannot recall even one singlet thread on the subject of a credit card company taking a direct debit for a closed account or when the balance was zero but so many threads about the problems caused by people cancelling direct debits.
You are responsible for checking your statements. It almost defies belief that you failed to notice that no payment was being made month after month to the credit card account.
I am also confused by the fact that after 4 months of non-payment the amount owing was only £48 which is the equivalent of 4 late payment fees. What about the existing balance?
Good advice but I feel it might not reach the masses.
Maybe its something Martin could do, like he does with the "pay off in full" credit card bill at end of the month.0 -
It's unfortunate that the DD was cancelled by your OH but not a bank error.
The CRAs have to report factual information about the account, which they are.
Chalk it down to experience and move on.
I hope the DD has been set back up to pay in full.I’m a Forum Ambassador and I support the Forum Team on the Budgeting & Bank Accounts, Credit Cards, Credit File & Ratings and Energy boards. If you need any help on these boards, do let me know. Please note that Ambassadors are not moderators. Any posts you spot in breach of the Forum Rules should be reported via the report button, or by emailing forumteam@moneysavingexpert.com. All views are my own and not the official line of MoneySavingExpert.
If you can't be the best -
Just be better than you were yesterday.0 -
Way too long a story for which is basically summed up in your heading.
Why would you expect your bank to tell you a direct debit had been cancelled by one of the account holders? It doesn't happen whrn you cancel a direct debit.
They are obliged to report the facts to the credit reference agencies which are your payments were made late. Only one person to blame here I'm afraid.
To be fair at least one bank does inform customers by letter when a DD is cancelled, TSB.
I don't know why they bother but they do for some unknown reason.0 -
Thank you for your feedback, do we know on an average what's the timeframe by when the missed payments will be given less importance by lenders. If I have had a clean file from then on.
Will it affect me in getting a car finance in Sep this year?
I would doubt one missed payment in the last 6 years will have a massive impact. You could add a notice of correction to the file if you really wanted to. Although I believe this will prevent lenders from making instant credit decisions as it needs to go to a human to read the notice.
http://uk.creditcards.com/credit-card-news/how-to-add-a-notice-of-correction-to-your-credit-reports-1356.php0 -
I feel like I am a victim of an action in which I had no involvement in at all and with no direct notifications sent to me regarding the same.
I assume you had a joint current account as you said your husband cancelled it by accident, so he "had involvement". You also have a duty to check your credit card statements, if you'd even picked up on it after the next credit card statement then you might have stood a chance.
I'm surprised they didn't block the card from working.
What measures have you put in place to make sure it doesn't happen again?0
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