Direct debit cancelled by bank. Now I get missed payment on credit card

Funqi

So, today I learned that HSBC will cancel a direct debit if it's not used for 13 months. And so a credit card that I hadn't used in a while just charged me a default fee and will mark my credit file. For the sake of £5! I had no idea they did that and no notification that they would cancel it!

I called the credit card, it was they who told me that the bank had cancelled the DD. After speaking to his supervisor, nothing he could do. I have to pay the fee and appeal with the credit agency about the mark on my file, which I had managed to build up to perfect up until now.

Honestly not expecting any help from the bank other than maybe referring me to where it's burried in T&Cs.

Anyone had experience with his? What chance do I have if I appeal to Experian?

kempiejon

Yup, I found this some years ago. Really annoying not much you can do. My CC has text alerts so I got a reminder the DD hadn't paid and made a debit card payment keeping me out of default.

In fact today I checked my current saved payees with first direct and I see I have lost details to a few mates and only have one of my nieces' payment details so I'll have to se those up again next month for her birthday.

eskbanker

DDs do automatically become dormant if not used:

https://forums.moneysavingexpert.com/discussion/comment/80235047/#Comment_80235047

PRAISETHESUN

Don't bother appealing to the CRAs (Experian, Equifax, TransUnion). They only report the information that they are given, which will come from your CC provider. It's an accurate representation of the facts, and HSBC have no obligation to remove it, so all you can do is ask nicely and see what they will do. If they don't want to help, then there's not really much you can do unfortunately.

As aside, if all you have is a single missed payment in an otherwise healthy credit file (ignore the score, and focus on the actual data - staying within your limits, paying your bills on time, etc) then I wouldn't worry too much. A single missed payment is just a drop in the ocean, and its effects aren't really going to matter too much, especially in a few months from now.

As for DDs, mandates only stay active for 13 months from their last use, as you've unfortunately found out. It's not strictly a HSBC thing, but a DD thing generally. Was their anything on your CC statement to say that a DD was/was not in place to cover your payment? You might have some grounds to complain if it said you had a DD in place but then it wasn't honoured? 

Funqi

Thanks for the replies.

Honestly, you think you do everything right and there's always something waiting to catch you out and take your money.

I wouldn't mind if they tell you when you set up a DD that it will expire if it's not used, or at least give some notification.

Funqi

kempiejon said:

Yup, I found this some years ago. Really annoying not much you can do. My CC has text alerts so I got a reminder the DD hadn't paid and made a debit card payment keeping me out of default.

In fact today I checked my current saved payees with first direct and I see I have lost details to a few mates and only have one of my nieces' payment details so I'll have to se those up again next month for her birthday.

I did get a text message to inform me that the payment failed. I checked my app and called them straight away and paid the whole balance, but they still charged me £12 and told me that they still have to report the missed payment to the credit agency.

Funqi

PRAISETHESUN said:

Don't bother appealing to the CRAs (Experian, Equifax, TransUnion). They only report the information that they are given, which will come from your CC provider. It's an accurate representation of the facts, and HSBC have no obligation to remove it, so all you can do is ask nicely and see what they will do. If they don't want to help, then there's not really much you can do unfortunately.

As aside, if all you have is a single missed payment in an otherwise healthy credit file (ignore the score, and focus on the actual data - staying within your limits, paying your bills on time, etc) then I wouldn't worry too much. A single missed payment is just a drop in the ocean, and its effects aren't really going to matter too much, especially in a few months from now.

As for DDs, mandates only stay active for 13 months from their last use, as you've unfortunately found out. It's not strictly a HSBC thing, but a DD thing generally. Was their anything on your CC statement to say that a DD was/was not in place to cover your payment? You might have some grounds to complain if it said you had a DD in place but then it wasn't honoured? 

Thanks.

No, there's nothing in my app or on any statement that notifys me about this. I had actually made a pretty big purchase on this card last month, but I paid it off in full a couple of weeks later.

Brie

I agree with Praisethesun that a single missed payment is a mere blip on your credit history and nothing to get concerned about - it happens to lots of us and we recover.

I, however, disagree that the CC could have warned you the the DD wasn't active.  There's no real way of them knowing if it is or not or if you even still have that same account.  Until they try to collect the payment. 

If there is any grounds for complaint it would be with HSBC who have not made it clear enough for you that the DD had expired.  Frankly I have a couple of cards I haven't used in years and have not had this problem but I don't bank with HSBC.  I would try lodging a complaint with them to say it isn't highlighted sufficiently on their T&Cs and this has left you financially inconvenienced.  Tell them by how much (the late fee plus a bit for interest) and hopefully they will be generous and cover the cost.

Funqi

I guess its probably in the banking T&Cs somewhere, or maybe in one of the emails you get every other month to let you know they've updated their T&Cs. This is HSBCs page about direct debits. No mention of it there.

It does say "The first payment will leave your account on the date you agreed and continue until the Direct Debit is cancelled." I suppose we shouldn't assume, as I find now to my cost, but you do naturally assume that means until you cancel it.

https://www.hsbc.co.uk/help/banking-made-easy/how-to-set-up-a-direct-debit/

Hoenir

One missed payment that's promptly rectified is neither here nor there. Things happen for any number of reasons. Users of credit card data aren't that draconian, 

Brie

Well frankly I'd lead with that then if you have read the T&Cs and they say the DD is in place until cancelled.  I would certainly assume that means until I/you cancel it not the bank.