Credit Card repayment via Direct Debit and manually

kkgbd2223

Hello,

Looking for some input on this.  I have a HSBC Credit Card where I agreed with HSBC to pay the minimum amount each statement by Direct Debit (as its under a promotional 0% rate).  For the July statement which became due for payment on 13th August, I had made a repayment manually on the 23rd July which was more than the minimum amount.  However, HSBC continued to take the Direct Debit for the minimum amount on 13th August which came as a surprise.

I have complained to HSBC and they have pointed me to their website (I can't post the link) which does state that even if I make a manual repayment to cover the amount due, they will still take the Direct Debit if the account is still below zero.

I "get the logic" here that they see it that I've agreed with them a form of "fixed repayment" that is due if the account is below zero regardless of any other repayments that may have been made.  However, from my point of view, I've agreed to only make the minimum repayment by the due date and they accepted that, to then take the Direct Debit after a manual repayment has been made would be making more than the minimum repayment thus I would have thought would put them in breach of contract.  I find no mention of this behaviour in the Credit Card Agreement or Terms and Conditions.

I have already escalated this to the Financial Obudsman (I don't expect a response TBH).

Any input welcome!

Thanks.

daveyjp

Different cards have different rules, same with refunds.  Some providers treat a refund before the due date as a payment against any balance, some don't and treat it as a credit to reduce the balance due by the following statement date.

Phoenix72

Hate to say it OP but you are in the wrong here and you are wasting everyone's time going to FOS. You accepted the T&C' when taking the card.

surreysaver

You need to read the T&Cs, it also probably says it on the statement.
Some credit cards adjust the direct debit if you make a manual payment, some don't.  And for those that do, you have to make a manual payment at least a certain amount of time in advance (about 5 working days or so) so the computer has time to adjust the direct debit 

Nasqueron

I've found it varies by provider and how late you leave it before the payment is due. I paid 3 cards off with a new BT this week, Barclays are taking my DD as normal mid-next week, Tesco (due a day or so later) haven't sent me anything though I have adjusted the DD down and NatWest (about a week later) haven't responded, their DD is due to be taken so I set it as the minimum as the amount I wanted to pay (based on the small balance left) is slightly less than the statement minimum. I was caught out by Halifax once when they took the full balance after a BT but the last couple of times I have used that in the Lloyds banking group, they text you after a manual payment advising on the DD going out.

Hoenir

When was the July statement dated? This will clearly state what HSBC intended to collect and when. 

Direct debit runs are set up well in advance of the due date. While it's possible to remove a singular transation from the run completely. It's no possible to revise individual figures. Such is the way the data is compiled. 

Complaining will achieve nothing. As your action is self inflicted. Rather any wrong doing on behalf of HSBC. 

surreysaver

They'll be others the opposite way round to you who would still want the direct debit to be taken after making an additional payment, so the banks cannot win if people don't read the T&Cs.

You're saying the bank has breached an agreement - it hasn't. You've accepted the T&Cs, and I would even go as far to say the bank has kept to the direct debit agreement by taking the direct debit that you've agreed for them to take.
 

CliveOfIndia

kkgbd2223 said:

I have already escalated this to the Financial Obudsman

Why ????

kkgbd2223 said:

I have complained to HSBC and they have pointed me to their website (I can't post the link) which does state that even if I make a manual repayment to cover the amount due, they will still take the Direct Debit if the account is still below zero.

So it's clearly stated in the T&Cs - which you read and agreed to when you first took out the card - that the Direct Debit would still be taken even if you make an interim payment.  What possible justification for a complaint to the FOS do you think you have?

I'm sorry, but this just highlights the importance of understanding what you're signing up for whenever you enter into any contract, whether financial or otherwise.

TadleyBaggie

It's very normal. I had a £1400+ balance on Sainsburys CC, it was set up to pay the full amount. As soon as the statement was generated I did a balance transfer to a 0% card leaving a nominal amount in the Sainsburys CC. This was a couple of weeks before DD was due to be taken. To my surprise they took the whole £1400+ amount leaving me a large credit balance I hadn't expected. I just used the card as normal for the next couple of months to use up the credit balance.

kkgbd2223

Thank you for all of your comments.  Actually, none of this is in the Credit Card Agreement or Credit Card Terms and Conditions.  HSBC have stated this separately in the Direct Debit terms and conditions and stated this is separate from the Credit Card Agreement and Terms and Conditions.  They are saying that when I set up the Direct Debit, I agreed with them to make the minimum payment via Direct Debit regardless of whether a manual payment has been made.  Setting up a Direct Debit to pay the HSBC card is of course completely optional.

The manual payment I made on the 23rd July more than met the minimum repayment therefore I have fully completed what I agreed in the Credit Card Agreement and T&Cs.  The issue here is the T&Cs on the Direct Debit agreement that I have agreed with them permit them to take the minimum payment regardless of whether I have made a manual payment which covers the minimum payment.  Thus if I make a manual payment, the Direct Debit will still go through so I'll pay more than I am required and more than I intended to.

I would suggest there is a conflict here between the Credit Card Agreement, Credit Card T&Cs and the Direct Debit T&Cs as this arrangement permits HSBC to take more than the minimum payment.

It's also very academic, the card is on a 0% promotional offer so I can easily re-spend the money to get the overpayment back.  I also could have cancelled the Direct Debit after I made the manual payment and then re-set it up the following statement period.

DullGreyGuy

Over the years have had several different cards with different approaches to what happens to the DD if a payment is made before the DD payment files are created. Personally, knowing the payment will be taken no matter what is the most robust and best option. 

The worst option was that the DD simply didnt collect which created two problem scenarios... you make a token payment well below the minimum intended to be an additional payment but mistime it so it stops the DD and you are then hit with late payment fees. Alternatively you remember how the system works and so make a manual payment for minimum payment + extra payment but you are too close to the DD date so the files already been created and the DD is taken anyway. 

For those that reduce the payment by the manual payment you still have the issue of payments too close to the DD date and the files have already been created so full DD is taken still. 

With the HSBC way it's simple, no matter when you make your manual payment you always know the DD will be taken at the set level unless you've reduced the balance to 0 more than 3 days before the DD will be taken. 

Certainly checking the HSBC site, it makes it very clear how it operates ttps://www.hsbc.co.uk/help/card-support/credit-card-repayment-options/ 

It feels like user error and HSBC doing exactly what they have said they will. Dont see why they should pay a £650 fee to the Ombudsman for user error but it all ultimately gets recharged to customers