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Direct debit refund refused!?
alex69
Posts: 196 Forumite
Here's an interesting one. I was charged under a correctly set DD mandate by npower. No payment was due for the month as the account was in credit. I thought it'd be straightforward to claim it under DD. I disputed the claim online (this is with smile, part of the coop bank), expecting it to be reversed immediately.
Instead I was asked a number of questions about the originator etc. Crucially the insisted that to show it was a mistake they needed to have the name of the person and contact telephone number from the originator's side that had stated it was a mistake.
Irrespective of whether it's a mistake or not I am not aware that the DD rules state I need to give evidence of acceptance from the other side that a mistake's happened although I admit the guidelines are not too precise:
http://www.bacs.co.uk/Bacs/Consumers/DirectDebit/Pages/DirectDebitGuarantee.aspx
Still my understanding was that if one didn't accept the charge they would reverse it. Otherwise what sort of guarantee is there?!
I thought it was an operator error, so I raised this to complaints. Complaints (after 8 weeks) responded to me that these are the procedures they implement and they would not issue a charge back without the name and extension of the originator who said it was an error. I had given them the switchboard number and they would not accept this.
Irrespective of the charge this is now a point of principle:
Did I have the right to be refunded or are they right in asking for all this information?
Instead I was asked a number of questions about the originator etc. Crucially the insisted that to show it was a mistake they needed to have the name of the person and contact telephone number from the originator's side that had stated it was a mistake.
Irrespective of whether it's a mistake or not I am not aware that the DD rules state I need to give evidence of acceptance from the other side that a mistake's happened although I admit the guidelines are not too precise:
http://www.bacs.co.uk/Bacs/Consumers/DirectDebit/Pages/DirectDebitGuarantee.aspx
Still my understanding was that if one didn't accept the charge they would reverse it. Otherwise what sort of guarantee is there?!
I thought it was an operator error, so I raised this to complaints. Complaints (after 8 weeks) responded to me that these are the procedures they implement and they would not issue a charge back without the name and extension of the originator who said it was an error. I had given them the switchboard number and they would not accept this.
Irrespective of the charge this is now a point of principle:
Did I have the right to be refunded or are they right in asking for all this information?
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Comments
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Sounds like a crock to me. They should refund first and investigate later if required.
In that situation I would reply pasting in the direct debit guarantee word for word, explaining the "error" made by the organisation and requesting the money be returned as per the guarantee.
That said (and since you raise the point of principle) I suspect it is very unusual for a utility company such as this not to comply with the direct debit guarantee by providing a bill showing the amount to be debited prior to the direct debit payment being made (or alternatively collecting only the ongoing fixed monthly payments as previously agreed).0 -
premierfella wrote: »Sounds like a crock to me. They should refund first and investigate later if required.
In that situation I would reply pasting in the direct debit guarantee word for word, explaining the "error" made by the organisation and requesting the money be returned as per the guarantee..
I did precisely that when raising the complaint explaining that given the wording I would expect that refund to be issued immediately. The officer investigating the complaint confirmed the internal procedures were correctly followed (ie they want the name of the person who said it was an error before refunding it, which seems absurd to me).
So the question is: are the coop's procedure not following the guidelines (in that case I'll complain to the obundsman), or are all banks doing this?0 -
So the question is: are the coop's procedure not following the guidelines (in that case I'll complain to the obundsman), or are all banks doing this?
It does seem a strange practice, one which I've not heard other banks following. When monies are refunded under the Guarantee the bank indemnifies the originator. At this point any error is agreed by the originator, and they refund the bank.
You could contact the Bacs helpline (0870 049 2717) and ask for advice on the matter. The wording of the Guarantee is vague, but it does not state you must prove the error, the indemnity requires the originator to confirm the error.
Below are details from the Bacs website on the refund process:-
http://www.bacs.co.uk/Bacs/Consumers/DirectDebit/HelpCentre/Pages/IncorrectPayments.aspxAnything I post is my opinion, so from time to time I may be wrong. I try to provide answers based in fact, however I don't know everything, so (like all posters on MSE), take what I say with a pinch of salt.0 -
. The wording of the Guarantee is vague, but it does not state you must prove the error, the indemnity requires the originator to confirm the error.
Thanks for the comments - will pursue.
They do not actually state I have to prove the error, but seem to suggest the claimant of the DD must have stated it was done in error (hence the request of details of the person who agreed it was an error). This seems absurd to me as the DD is meant precisely to serve the purpose of avoiding disputes between the two parties. Under their reading anyone signing a DD mandate with a company making spurious claims (not my case I hasten to add) would have no recourse under the DD mandate.0 -
My husband had this with Co-Op cashminder and Swalec.
The insisted on getting the name, position and extention number of someone within Swalec, he was trying to claim under the 'any change to the date, amount or frequency of the DD' clause that he would be refunded by the bank. Co-Op point blank refused to do it over the phone without the information.
He did go into the branch with a copy of a DD guarantee and wave it about in front of them, I know this isn't possible for everyone, not sure how that stands with Smile either, but after really make a fuss they agreed to the refund.
In our case, Swalec changed the date dramatically, it was paid on 1st of the month, they then also took a further payment on 19th which was a different amount and then on 22nd they took their normal payment but never once told us of this.
As far as I have come across, it is only Co-op who do this regarding DD guarantee.
Hope you get some resolve on this.0 -
Up until June I was dealing with DD indemnity claims from the bank end. Somebody else did the taking of the claim (phone banking etc)
It is my understanding of the scheme that your bank is obliged to accept your indemnity claim. You have informed the bank of the mistake and they should therefore accept it - there is no requirement whatsover for them to prove that the charge was not valid
Assuming the company acknowledges the mistake; The bank refund you the customer for the error, they then write to the company via the details they have lodged with the DD scheme. Company then sends a cheque to the bank and everything is hunky dory.
If it doesn't work and company disputes the mistake; the bank refund you and get a letter from the company demonstrating the that DD was valid (if they do not prove the DD to be correct the claim keeps going) and the bank re-debit your account.
If the company fail to acknowledge the DD, after 8 weeks (I think, memory is hazy) then it goes to an interbank liason team and they get debited by their bank.
How much was the DD for btw?Proud of who, and what, I am. :female::male::cool:0 -
Catflea, this is exactly how I assumed it'd work. The bank would give you the benefit of the doubt if you wish, and it'd be up to the company to prove they were right. If they did then the bank would debit you the money again etc.
The claim was some 80 quid - don't remember. That's beside the point. As I said this is a matter of principle, or rather annoyance, as the coop tried to do this with me another time previously and after a second message they overturned it to say you're right we'll refund it straightaway.
I am very busy right now but given the plenty of agreement here I'll certainly raise the complaint with the information provided. It may just be the coop are reading the agreement in a way that is in line with their procedure but it certainly does not folllow the spirit of DD agreements which is to protect the customer.0 -
The reason I asked the value of the DD was not a matter of "oh, never mind its only xxx" but the way DD indemnities are done there is a small risk of loss to the bank therefore banks can be a bit cagey about larger amounts (the guys who accepted DD claims couldn't accept anything over £150 without consulting a senior when I was there)
The concept of how it works SHOULD mean no risk of loss but say the company says no and by that time the customer has closed their accounts the bank has no means of easily recovering the funds they paid out. Happened a few times in the course of my work for some reasonable amounts. We had to write the vast majority of them off.Proud of who, and what, I am. :female::male::cool:0 -
I was charged under a correctly set DD mandate by npower. No payment was due for the month as the account was in credit.
If that's an accurate statement .... in particular the bit I've made bold .... then are you sure your facts are right? Where npower offer a monthly DD then they take the DD irrespective of whether the account is in credit / debit or neutral. Look at the T&Cs you have with them.
Essentially they divide your estimated annual bill by 12 .... and then take that value monthly. In such a situation - and owing to the seasonal nature of energy use - it's quite common for accounts to be in credit for a while. But if the company doesn't collect the DD for that period ..... it destroys the whole arithmetic of what is an annual plan.
If you feel you're overpaying ... up to you to negotiate the monthly value downwards. Or to change the value online .... which they allow. But if you claim (incorrectly, I suspect) under the DD Guarantee then npower will simply abort your plan - put you onto quarterly billing - and you lose the £100 discount they offer for monthly DDs.
You have to give tacit evidence at least of 'an error' being made .... as Banks are getting cautious of the mass of refund requests they get particularly around Christmas / post Christmas and holiday periodsIf you want to test the depth of the water .........don't use both feet !0 -
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