Standing order issue

ryan92

Looking for a bit of advice.
I had set up a standing order and had meant to put next month as the start date rather than this month.

The SO has came out of my bank account yesterday and put me over £300 into an unarranged overdraft ; the account is also a basic account as well so I assumed this should have been stopped if there was no funds in the account.

Is this normal for a bank to allow such a high payment to go through despite there being lack of funds?

eskbanker

It's up to the bank as to whether to honour payments that would take you into the red but they can't charge you for that unarranged overdraft if it's a basic account.  Which bank is it?

35har1old

eskbanker said:

It's up to the bank as to whether to honour payments that would take you into the red but they can't charge you for that unarranged overdraft if it's a basic account.  Which bank is it?

Does a basic account have a overdraft available ?

ryan92

It’s Virgin Money - basic account.
no overdraft as it’s a basic account

eskbanker

35har1old said:

eskbanker said:

It's up to the bank as to whether to honour payments that would take you into the red but they can't charge you for that unarranged overdraft if it's a basic account.  Which bank is it?

Does a basic account have a overdraft available ?

ryan92 said:

It’s Virgin Money - basic account.
no overdraft as it’s a basic account

Can I apply for an Arranged Overdraft?  

There's no Arranged Overdraft with the M Account as it is a basic bank account

https://uk.virginmoney.com/current-accounts/questions-and-answers/m-account/#can-i-apply-for-an-arranged-overdraft

ryan92

I completely understand there may be a buffer where they allow some payments to go through but for one of nearly £364 is a bit excessive to then request it back immediately.

I hold my hands up and admit I put the wrong date in, but I'd have expected them to have rejected the payment due to lack of funds.

eskbanker

ryan92 said:

I completely understand there may be a buffer where they allow some payments to go through but for one of nearly £364 is a bit excessive to then request it back immediately.

I hold my hands up and admit I put the wrong date in, but I'd have expected them to have rejected the payment due to lack of funds.

Bottom line is that you can't rely on a bank not to honour an authorised payment for lack of funds, as it remains at their discretion, but VM make it clear that they expect you to resolve it quickly:

Make sure your M Account has enough money at the end of the day for anything that’s coming out, like Direct Debits. If there isn’t enough money, the payment usually won’t go through. If it does go through, we’ll want the money back asap!

https://uk.virginmoney.com/virgin/assets/pdf/m-account-terms.pdf

However, when they don't charge for unarranged overdrafts it won't cost you anything to drag your feet, or have they threatened account closure or similar?