Tesco bank failed to take DD; threatening my credit record

Batesy1976

kaMelo said:

Batesy1976 said:

kaMelo said:

Batesy1976 said:

Thrugelmir said:

Batesy1976 said:

Thrugelmir said:

Direct debits have to be set-up a minimum of 10 days before the collection date. As direct debit runs are a batch process.  Company's will be creating these batches well in advance. While it's possible to delete an individual collection prior to the run date. It's not possible to add. 

Chalk it up to experience. 

They're not setting up a DD though, there was already one in place.

They could very easily have left the existing instruction in place. In fact, every company I've ever changed a DD on has made me aware the existing DD would be taken if there wasn't time, and in cases where there wasn't, that's exactly what has happened.

The instruction was changed, i..e. the amount to be collected.  DD runs cannot be manually amended. 

And as I've said, every time I've had that happen the company has had no problem taking the existing amount if there was not enough time to change it.

Because they have not had time to change it then of course they will as it hasn't changed. It's all about timelines as to whether changes occur in time or not, whether an institution retains the current DD for a final payment as well as the modified one or cancels it immediately upon receipt of a new mandate. 
The usual process will cancel an existing DD upon receipt of an updated DD. The updated DD will only apply to the next statement.  Now there are some who will do other things, Barclaycard for example did update the DD and applied it to the current statement as there was enough time but this is the only time I've ever had this happen. There will be those who keep a current DD even though they have a new DD mandate in place but again not all will do this.

If you assume that altering a DD will cancel the current one and put in place a new one that will cover future statements only, meaning you will need to cover current statements with manual payments, then you will not get caught out.
It should be made clear to you this will happen when modifying a DD but in my experience it's not always the case.

I'm not assuming the change will be applied to the current statement.  And I've never had that happen.  I'm saying that if it has not been able to be changed before the next payment is due, the existing arrangement stays in place until it can be changed.

I'm not saying no other provider does it the way Tesco does, I'm sure some do, I've just yet to experience it and I have been in this situation a few times.  And I don't think it's at all reasonable to do it this way, even if they have T&C's that allow it. It's very anti-consumer, it doesn't make much sense to do it like this and it's clearly very possible to NOT do it this way.  The only reason to do it this way seems to be to catch people out.  OK fine, I guess, but I wouldn't expect the FOS to side with Tesco in this situation given they're happy to ignore the law and/or T&C's and look at fairness and this doesn't strike me as very fair.

 I'm sure it could be handled better by some companies, it should always be made clear a manual payment will be required if it is but, it's wrong to just assume a company is "trying to catch people out" because they can.

The reason why I said I assume they're trying to catch people out is because A) it can clearly be done in a way that doesn't cause the payment to not be taken and B ) why would a company put in place a system that causes them (in at least some cases) to not get paid.  Presumably, they want paying, right?

nyermen

As someone with a little experience in this area (BACS/AUDDIS), it sounds like the issue is with Tesco's systems/processes - and seems very unfair if they didn't notify OP of the impact of an amendment.

I note Tesco isn't a direct participant for BACS apparently (https://www.bacs.co.uk/access/bacsdirectparticipation/pages/bacsparticipants.aspx), however that just means they work through one of them (like any corporate does).  7 - 10 days before maybe (depending on the participant bank) but not 3 weeks.  

phillw

kaMelo said:
Because it's set up as a variable DD already hence they can vary the amount they take as long as both;

There is no concept of a fixed DD, they can always vary the DD. If they don't give you enough notice then you can complain and get a refund.

phillw

Fingerbobs said:
I think it's pretty much only Lloyds Banking Group cards that still take the full DD amount even if interim payments are made (and even they stop the DD completely if the statement balance is paid in full before the due date.)

All my cards take the statement balance despite me making debit card payments to meet bonus on my debit card.
It used to be as you said, but they all changed years ago.

phillw

Batesy1976 said:
The reason why I said I assume they're trying to catch people out is because A) it can clearly be done in a way that doesn't cause the payment to not be taken and B ) why would a company put in place a system that causes them (in at least some cases) to not get paid.  Presumably, they want paying, right?

Right, as they can request whatever value they like and you are just selecting what value you want them to request then there is no reason to skip it in the next run. It probably took more work to implement it like this.

Pre covid I tried to do this on the phone, because if I speak to a person to say I want to go from minimum to full payment and they make the change and don't tell me I need to do anything then it's not my fault at all.

Fingerbobs

phillw said:

Fingerbobs said:
I think it's pretty much only Lloyds Banking Group cards that still take the full DD amount even if interim payments are made (and even they stop the DD completely if the statement balance is paid in full before the due date.)

All my cards take the statement balance despite me making debit card payments to meet bonus on my debit card.
It used to be as you said, but they all changed years ago.

You must have different cards from me then. The only ones I have that still take the full DD amount even after interim payments (unless I clear the balance) are LBG.
Nationwide, Barclaycard and Santander all reduce the DD if interim payments are made. 

jamiewakeham

Morning, all: OP here.  I've been waiting for the 7th of this month to see exactly what happens.  I have just shot a video of me altering my direct debit - it's here https://photos.app.goo.gl/fadczgiz9GjLPxcK8 if anyone wants to see it.

It quite clearly says "Note that this may not be changed in time for your latest statement's payment and your previous Direct Debit instruction may still be deducted as shown in your statement.  Please check your bank account to monitor your payment." (my emphasis)

That is really quite a different message to "it is confirmed that this would not be updated until after your next statement was produced and that a manual payment would be required", which is the email I got back from Tesco.

I accept that it tells me to check my bank account, but any rational person reading that message in the app would believe that, even if the DD was not amended in time, then at the very least the previous instruction to make a minimum payment would still be carried out.  

On that basis, I'm going to write back to Tesco and show them this video.  I had no reason to suspect that a payment might not be taken at all, and it's therefore unjustifiable to place a marker on my credit record.  If they still won't take it down then I think it's ombudsman time.

ceremony

kimwp said:

Shakin_Steve said:

So....if a direct debit is for a different amount every month, i.e. a mobile phone bill, how do they manage to change the amount in the, say, ten days between billing and collection?

Presumably because the instruction ("debit the entire amount due") hasn't changed.

I run a small business that uses direct debits, and there are several different ways they can be set up. You can set up a direct debit to "take a fixed amount" and you can set up a direct debit to "take a variable amount up to a certain value". 

We have our own proprietary billing software, and now that it's properly set up when we do the "take a variable amount up to a certain value" DD, we set the maximum value it can take at the top tier of our subscription model. We can vary the DD up to that amount without needing to actually "make a new direct debit", and we do so regularly because we allow our customers to change their subscription tier up and down at will. We have some older customers who are on direct debits with obscenely high maximum limits.

I don't work for a credit card company so I've no idea how their DD works, but it wouldn't surprise me if they use the same sort of thing, authorizing for "a variable bill up to X amount", but needing to submit a new DD if the expected payment goes above that.

Batesy1976

jamiewakeham said:

Morning, all: OP here.  I've been waiting for the 7th of this month to see exactly what happens.  I have just shot a video of me altering my direct debit - it's here https://photos.app.goo.gl/fadczgiz9GjLPxcK8 if anyone wants to see it.

It quite clearly says "Note that this may not be changed in time for your latest statement's payment and your previous Direct Debit instruction may still be deducted as shown in your statement.  Please check your bank account to monitor your payment." (my emphasis)

That is really quite a different message to "it is confirmed that this would not be updated until after your next statement was produced and that a manual payment would be required", which is the email I got back from Tesco.

I accept that it tells me to check my bank account, but any rational person reading that message in the app would believe that, even if the DD was not amended in time, then at the very least the previous instruction to make a minimum payment would still be carried out.  

On that basis, I'm going to write back to Tesco and show them this video.  I had no reason to suspect that a payment might not be taken at all, and it's therefore unjustifiable to place a marker on my credit record.  If they still won't take it down then I think it's ombudsman time.

That's exactly the sort of message I'd expect to see when amending a DD and makes far more sense than what they claimed it would have shown.

kaMelo

jamiewakeham said:

Morning, all: OP here.  I've been waiting for the 7th of this month to see exactly what happens.  I have just shot a video of me altering my direct debit - it's here https://photos.app.goo.gl/fadczgiz9GjLPxcK8 if anyone wants to see it.

It quite clearly says "Note that this may not be changed in time for your latest statement's payment and your previous Direct Debit instruction may still be deducted as shown in your statement.  Please check your bank account to monitor your payment." (my emphasis)

That is really quite a different message to "it is confirmed that this would not be updated until after your next statement was produced and that a manual payment would be required", which is the email I got back from Tesco.

I accept that it tells me to check my bank account, but any rational person reading that message in the app would believe that, even if the DD was not amended in time, then at the very least the previous instruction to make a minimum payment would still be carried out.  

On that basis, I'm going to write back to Tesco and show them this video.  I had no reason to suspect that a payment might not be taken at all, and it's therefore unjustifiable to place a marker on my credit record.  If they still won't take it down then I think it's ombudsman time.

I think the message is pretty clear that you should keep your eye on things but it does give the impression that either;

1.The new DD will be taken
2.The old DD may be taken as there was not enough time to change it.

What it doesn't give is any indication that no DD may be taken. I think they cover it with telling you to keep your eye on things but it could definitely be clearer.

As to what you want to happen, you've complained about it and they refunded the non payment fee so you're not out of pocket. I'd be amazed if they marked it as a "missed" payment, rather just marking the payment as £0 instead. You obviously don't want either of these but I don't see how they can do so completely. 
They can avoid putting a "missed" payment, they can avoid putting a "zero" payment, but even if they did so the running balance will remain the same so the "evidence" is there if someone wanted to find it and I don't see an ombudsman asking them to change that. 

If however you want to put the energy into it then it is of course your prerogative to do so.