Direct Debit taken in error. Who pays the overdraft charge?

KTF

I have a direct debit for the full amount set up for the Abbey cashback credit card. For the second month in a row the direct debit for the full amount has been taken despite me making the payment manually using the Nationwide online banking 10 days prior and the payment being shown as 'received' by Abbey National on the online credit card banking.

As a result of the full direct debit being taken this month, it has pushed me into the red and attracted a £20 charge from Nationwide for an unauthorised overdraft so my question is who pays this?

I have spoken to Nationwide and they have recalled the payment under the Direct Debit scheme and spoken to Abbey are going to cancel the direct debit and return the money as soon as they can but Nationwide say Abbey should pay the £20 fee as its their fault and Abbey say that a form has to be filled in but that cant be done until the payment has been reversed so who do I talk to to get this resolved?

YorkshireBoy

If this is an MBNA run Abbey card (is it?) MBNA have done nothing wrong, according to the agreement you have with them. If you check your 'confirmation of direct debit instruction' letter from MBNA you'll find it says that they will collect a DD payment based on the statement date balance, and also says that you must give MBNA 7 working days notice to stop them claiming this DD payment.

So, bearing in mind it may be yourself who has caused the problem I'm not really sure if either of the organisations involved are at fault and *should* pay. Of course, I hope you're successful in getting one of them to consider a goodwill gesture. Will Nationwide report the mis-use of your overdraft facility to the CRA's?

KTF

Its the Santander run Abbey credit card with the 5% cashback on food. I was under the impression that the DD would only be taken if there was a balance showing on the card as I am not aware of my other credit cards taking payment when I have paid them off in full in the past prior to the DD date.

I did ask if anything would appear on my redit report as a result and and Nationwide have said no.

Update: Abbey have just called back to say that the do a run 5 days before the DD date and if there is still a balance showing on the card then the DD is processed and returned if the balance on the card is later found to be zero. They also said that they would ask that the £20 charge be refunded to the card or via cheque so I shall see what happens.

daveyjp

"who do I talk to to get this resolved?"

How about a word with yourself?

If you have a DD set up to pay it in full why complicate matters by paying it yourself early?

KTF

Because the DD isnt taken out till the end of the month and Abbey cant change the date to the start of the month when all my other DD get taken out (I get paid at the start of the month) so I pay it when the statement arrives so its dealt with and I know how much I have left in the account for the rest of the month.

Milarky

It's important to realise that all credit cards with DDs set up treat ad hoc payments between the statement and due dates differently so you have know

a) what they say would happen ('terms and conditions') if you make ad hocs, and

b) be aware that they don't always do as they say ('reliability') anyway.

For instance, Egg say they will adjust the collection amount if they receive a payment at least 5 working days before the due date but I've found they have still collected where the payment was received a week (it must have been a BT from elsewhere) before. So maybe by '5 working days' they actually mean '5+1' - and maybe they do mean '5' but can't be relied on.

In this case, do we actually know what Abbey/Santander say they will do if an ad hoc payment is received and what deadline they set for the cut off?

You should really just have had the DD for minimum payment set up and paid the rest (or even the full balance to be totally safe) yourself. BACS transfers from the likes of Nationwide are quite reliable, 2 days, so why would you doubt it would arrive in time?

Finally, if this were a card offered by MBNA (I think they are the same) the option to do debit card payments does exist. This will also say when you must request payment for when it will be applied the account (the working day before) which is then your guarantee. The only thing you then have to ensure is that your current account will have the cleared funds (including overdraft) that day. There is nothing to stop you using several debit card payments, either, to the same total if you have more than one current account.

YorkshireBoy

Milarky wrote: »

In this case, do we actually know what Abbey/Santander say they will do if an ad hoc payment is received and what deadline they set for the cut off?

I have my suspicions that, because Santander plaigiarised the MBNA T&C's (eg £5 min payment) when they launched their own card, they may also have the same (ie MBNA) DDI wording re the 7 working days I mentioned earlier. Perhaps KTF could confirm?

daveyjp

KTF wrote: »

Because the DD isnt taken out till the end of the month and Abbey cant change the date to the start of the month when all my other DD get taken out (I get paid at the start of the month) so I pay it when the statement arrives so its dealt with and I know how much I have left in the account for the rest of the month.

Cancel the DD then.

KTF

I have cancelled the DD now.

Abbey said that they do a DD run 5 days before the date the payment is due so if a payment arrives in the account after this point then the direct debit is taken then returned.

In my case the Abbey system said the payment was received on December 20 but on the back of the statement it says allow 7 working days for it to clear so they requested the DD as well.

Milarky: Its not that I didnt expect the amount to arrive on time, I just paid it early as I had the cash to do so and with Xmas and New Year getting in the way of the banking system I thought it better to pay it off early. The Santander Abbey card doesnt seem to allow part Debit Card payments via the online interface like MBNA offers.