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

Phoenix72

Interesting article that implies that it is the responsibility of the  receiver of the DD, not the bank, to tell you it's expired - https://www.thisismoney.co.uk/money/saving/article-1690010/Bank-axed-direct-debit-without-telling-me.html

OP, for the avoidance, did your CC statement say it would be collected via DD?

eskbanker

Phoenix72 said:

Interesting article that implies that it is the responsibility of the  receiver of the DD, not the bank, to tell you it's expired - https://www.thisismoney.co.uk/money/saving/article-1690010/Bank-axed-direct-debit-without-telling-me.html

That article was from early 2010 though!  That's not necessarily to say that it's out of date, but it seems like the current official DD rules, as published by BACS, are password protected rather than publicly visible?

https://www.bacs.co.uk/resources/direct-debit-and-bacs-direct-credit-guide-and-rules/

molerat

The dormancy period was extended to 24 mths during covid to allow for payment holidays etc and publications were put out to that effect.  I have not seen anything to show that has reverted back to 13 mths but the rules are behind a log in so difficult to see.

temporary_increase_direct_debit_dormancy_period_during_covid19.pdf (bacs.co.uk)

Interestingly a publicly available BACS page still show the dormancy period as extended to 24 months

https://www.bacs.co.uk/resources/glossary/

I would be tempted to raise a complaint with both organisations and see where it goes as this clearly known by everyone rule seems to be hidden away from public view and the seemingly only publicly viewable page states 24 mths.  I certainly cannot find it in any of my bank's t&cs.

DullGreyGuy

Funqi said:

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?

It will be a missed payment charge and mark not a default, as others have said it'll make little difference on an otherwise clean record and that little difference only applies if you are going to be applying for more credit in the near term. 

Credit reference agencies can only display what they are told, it's the card issuer that has the power to remove the marker. You can apply a comment to the marker with most credit reference agencies but most credit decisions are straight through processing so won't consider whatever short text you decide to put against the marker yourself. 

Probably sounds a case of not checking your credit card statement properly though as they do tend to state if you have to pay or if they will be collecting by DD. A number of our card issuers also send a text to confirm they are going to be taking payment shortly by DD and whilst its harder to be triggered by the absence of a reminder than receiving a reminder its another sign that things may not be right. 

Hoenir

Originators of direct debits will automatically cancel their held mandates if it's not used for 13 months. 

CliveOfIndia

Hoenir said:

Originators of direct debits will automatically cancel their held mandates if it's not used for 13 months. 

That's true - kind of.  It always used to be the case that a DD was removed if unused for 13 months, standard practice across the board.  During Covid, the dormancy period was increased to 24 months.  When things got back to normal, some banks kept it at 24 months, some reverted to 13 months.

retiredbanker1

IMO If the OP paid the whole balance within 24 hours of the failed D/D - The bank will not report it to the CRA's.

They have nothing to worry about - perhaps a sheepish phone call to HSBC might even get the £12 charge refunded.

sammyjammy

retiredbanker1 said:

IMO If the OP paid the whole balance within 24 hours of the failed D/D - The bank will not report it to the CRA's.

They have nothing to worry about - perhaps a sheepish phone call to HSBC might even get the £12 charge refunded.

Its not the bank/HSBC that recorded the late payment and charge the fee, its the credit card.

OP when they tell you they have to report it thats nonsense, check what the statement said regarding payment and consider a formal complaint/request to remove the marker

lr1277

At at tangent, having unused cards has been mentioned on this thread. In my experience unused cards are closed by the card provider. The period it is unused before closure will be down to the card provider.

I had 2 different cards with my bank. One which was used and the other (older) card never got used. At some point (which I did not notice, but I didn't monitor my finances then as closely as I do now), the unused card was closed by the bank. A pain when I came to use it.

Obviously if the card is closed there is no need to worry about the direct debit.

Nasqueron

sammyjammy said:

retiredbanker1 said:

IMO If the OP paid the whole balance within 24 hours of the failed D/D - The bank will not report it to the CRA's.

They have nothing to worry about - perhaps a sheepish phone call to HSBC might even get the £12 charge refunded.

Its not the bank/HSBC that recorded the late payment and charge the fee, its the credit card.

OP when they tell you they have to report it thats nonsense, check what the statement said regarding payment and consider a formal complaint/request to remove the marker

They don't have to, but equally, they don't have to remove it and a formal complaint isn't guaranteed to do anything, it's a factual reporting of events - even if it was not an intentional act. I am actually surprised the CC company didn't close the account after 13 months of not using it.