Tesco Bank automatically cancels Direct Debit whilst on Breathing Space

w81

Just a warning to others, I had applied for breathing space via Stepchange. I wanted to as far as possible try to protect my credit file whilst on breathing space, and had believed that I should still maintain minimum payments were possible and had aimed to do this. All other creditors had collected (a reduced) minimum payment as usual but I realised to my horror that for some reason Tesco had not collected the direct debit and I was now in arrears. I contacted Tesco and they said no DD in place. But this is contrary to the letter I had received at the outset of the breathing space:

"If you miss a payment your account will fall into arrears... you r agreed minimum payment will still be due... If you're currently paying by Direct Debit this will not be affected, and payment will be taken in the usual way on the date you have agreed."

Tesco have said:

"When the holds are applied, our system automatically suspends the DD for the duration of the hold and all charges, fees and interest are suspended during this time also... To set your expectations, your DD will be suspended during the hold period. If you are looking to maintain the minimum payments during the hold time, you will need to ensure payments are made manually until the hold expires."

They have acknowledged their mistake and "highlighted to the relevant department for review as this doesn't happen." Gave given me £75 compensation and promised to remove my late payment flag (when I realised the DD hadn't been taken it was obviously too late). I did feedback to them that there approach seems different to other banks ands they should make it a lot clearer without all of the confusion. 

Anyway just in case it is useful for others. 

Will

sourcrates

You can`t expect to "protect" your credit file if you can`t afford your debt repayments.

Honestly you should commit 100% to debt management if your going to do it.

Breathing space is designed to give you 60 days free of collection activity by your creditors, but your still supposed to maintain payments, its a pointless exercise for most people, if they could make payments, they wouldn`t need breathing space would they.