Direct debit ignores refunds - John Lewis Partnership card

myrtleboff

I pay my credit card off in full every month by direct debit. At the end of December the statement balance was £7,000 but since the statement date I had refunds of £6,000 so I only owed £1,000 but they still took the full £7,000 leaving my account in credit. Is there a law against this?

MattMattMattUK

myrtleboff said:

I pay my credit card off in full every month by direct debit. At the end of December the statement balance was £7,000 but since the statement date I had refunds of £6,000 so I only owed £1,000 but they still took the full £7,000 leaving my account in credit. Is there a law against this?

No, there is not.

If you ask them they will transfer the balance back to your bank account.

sausage_time

Some issuers take credits/refunds into account when taking the direct debit, some don't.  In my experience Amex don't but NatWest/RBS do for example.

HillStreetBlues

myrtleboff said:

I pay my credit card off in full every month by direct debit. At the end of December the statement balance was £7,000 but since the statement date I had refunds of £6,000 so I only owed £1,000 but they still took the full £7,000 leaving my account in credit. Is there a law against this?

Depend on the company and also depends if enough time to alter the DD

grumpy_codger

In this exceptional case it was worth changing the DD to a minimum payment (or cancelling it) and making a manual payment, if needed, after the DD was taken.

BTW, the Card terms & conditions (PDF) say "We may treat this refund as a payment to your account"

zagfles

This is how it should work. Refunds are negative spending, you wouldn't expect spending after the statement date to affect the DD would you? 

Some providers do treat refunds as payments, which just causes other complications/confusion - if you get a refund for a spend in the same statement period, it reduces the DD for the previous statement and you then need to pay for the spend which you've been refunded for in the next statement. Not usually a problem but can be if you don't account for it, and can cause problems if you have a 0% balance transfer. 

born_again

myrtleboff said:

I pay my credit card off in full every month by direct debit. At the end of December the statement balance was £7,000 but since the statement date I had refunds of £6,000 so I only owed £1,000 but they still took the full £7,000 leaving my account in credit. Is there a law against this?

Card Provider have T/C that prohibit you purposely putting your card into a credit balance.

In this case just ring them up & ask them to transfer the funds back to your bank account. Make sure that they do not charge for it.

WillPS

Some card providers will use refunds and other payments to modify the DD amount, but even those providers eventually hit a point around a week before payment is taken when the payment amount cannot be modified.