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  • FIRST POST
    • Hattie625
    • By Hattie625 13th Apr 18, 1:40 PM
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    Hattie625
    Possibly the real reason why Tesco are ending the direct debit facility into their savings accounts
    • #1
    • 13th Apr 18, 1:40 PM
    Possibly the real reason why Tesco are ending the direct debit facility into their savings accounts 13th Apr 18 at 1:40 PM
    There has been a lot of speculation lately as to the real reason why Tesco Bank are ending the facility of direct debit payment into their savings accounts. It has been suggested that the facility has been abused by people setting up 1 direct debits to meet the requirements for interest or reward payments on various current accounts.

    Over the last 2 or 3 months I have started to receive monthly statements on my Tesco Bank internet savings accounts. Previously the statements were sent once a year. I understand that there has been a recent change in the regulatory requirements and monthly statements are now required to be issued in respect of savings accounts where there have been transactions (in or out) on the account in the previous month.

    Although many (most?) account holders are "paper-free", there will be a substantial minority of customers (including myself) who have opted to receive paper statements. The cost of producing monthly statements, and posting them out to customers, where a savings account is being used only to receive a few incoming and outgoing 1 payments in a month could have persuaded Tesco to end the facility.

    It's ironic that a regulatory change designed to be for the benefit of the customer could possibly have caused the demise of a useful facility to many.
Page 1
    • YorkshireBoy
    • By YorkshireBoy 13th Apr 18, 2:13 PM
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    YorkshireBoy
    • #2
    • 13th Apr 18, 2:13 PM
    • #2
    • 13th Apr 18, 2:13 PM
    Been on my mind too.

    But they could have very easily sorted the 3 Ps (paper, printing, and postage) issue by serving 60 days notice that they were moving to online only*, rather than encouraging their customers to close their old (now bonus exempt) IS and IASA accounts by removing the DD facility.

    The fact they didn't do that, and chose the path they did, just shows they were fed up of the abuse and wanted rid of those customers.

    I do wonder though, if the DDs had been for, say, 10 each, and customers didn't send the funds back the same day, but once a year, whether they would have made the move they have?


    * I'm surprised they didn't launch the IS years ago as an online only account. I can understand the IASA being paper, because that had a card and the account could be transacted upon in store, but not the IS?
    Last edited by YorkshireBoy; 13-04-2018 at 2:48 PM.
    • A_T
    • By A_T 13th Apr 18, 2:26 PM
    • 396 Posts
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    A_T
    • #3
    • 13th Apr 18, 2:26 PM
    • #3
    • 13th Apr 18, 2:26 PM
    It all comes down the the same thing Tesco don't want their currents accounts used as a savings account.
    • Sea Shell
    • By Sea Shell 13th Apr 18, 2:31 PM
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    Sea Shell
    • #4
    • 13th Apr 18, 2:31 PM
    • #4
    • 13th Apr 18, 2:31 PM
    I think that Banks etc. need to be very savvy these days when setting their T&C's as they must know that any little "loophole" or "advantage" will be found initially by some customers, and due to forums such as these, become widely known and "exploited" en masse.

    They need to think through these possibilities BEFORE launching accounts, if they don't want to be used and abused, in a way they didn't intend.

    It was good whilst it lasted. RIP Tesco DD's
    " That pound I saved yesterday, is a pound I don't have to earn tomorrow "
    • aj23
    • By aj23 13th Apr 18, 2:34 PM
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    aj23
    • #5
    • 13th Apr 18, 2:34 PM
    • #5
    • 13th Apr 18, 2:34 PM
    Not another thread about this! Can't people keep it to one thread instead of keeping on creating threads on the same thing.

    I get why people are doing it (I wish I had that much time), but Tesco isn't there to facilitate you setting up Christ knows how many direct debits for 1 each just to keep your perks with current accounts with other banking providers. It is a waste of their time and resources to administrate those countless accounts. As a result, those who are genuinely using this account as a savings account are now being affected by those who are kinda abusing the system (again, i do get why people were doing it) and that is usually what happens. The few are affecting the many.
    • chiefnoodle
    • By chiefnoodle 13th Apr 18, 2:36 PM
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    chiefnoodle
    • #6
    • 13th Apr 18, 2:36 PM
    • #6
    • 13th Apr 18, 2:36 PM
    well I had my DDs going into ISAs for the kids which can't be withdrawn until they're 18. Its true the DDs were only for a pound each, but it added up pretty quick and tesco will now be losing a fairly big pot. As now they have stopped DDs, I will transfer the ISA to another provider; had the DDs continued, the entire amount would've remained with them so that the DDs would keep going.

    So they could've/should've left the DD facility for accounts where the money is tied up (and online only as per previous comment)
    I haven't made a signature as I don't possess a sense of humour.
    • aj23
    • By aj23 13th Apr 18, 2:37 PM
    • 351 Posts
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    aj23
    • #7
    • 13th Apr 18, 2:37 PM
    • #7
    • 13th Apr 18, 2:37 PM
    It all comes down the the same thing Tesco don't want their currents accounts used as a savings account.
    Originally posted by A_T
    No, because you've never been able to place direct debits from your Tesco current account to your Tesco savings account.

    They have a problem with people who have current accounts with other providers who are suing a Tesco savings account which accepts inward direct debits to keep their perks with the other providers like monthly interest enabling them to meet their requirements. I get why people are doing it, but I also get why Tesco is halting it. It's a waste of time and resources.
    • fun4everyone
    • By fun4everyone 13th Apr 18, 2:38 PM
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    fun4everyone
    • #8
    • 13th Apr 18, 2:38 PM
    • #8
    • 13th Apr 18, 2:38 PM
    I do wonder though, if the DDs had been for, say, 10 each, and customers didn't send the funds back the same day, but once a year, whether they would have made the move they have?
    Originally posted by YorkshireBoy
    I completely agree and people doing 1 dd's were being ignorant blockheads. If that hadn't been going on it might have lasted longer.

    That said, if it is possible to take the p iss then humans always will and imo it would have been pulled eventually anyway.
    • aj23
    • By aj23 13th Apr 18, 2:39 PM
    • 351 Posts
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    aj23
    • #9
    • 13th Apr 18, 2:39 PM
    • #9
    • 13th Apr 18, 2:39 PM
    well I had my DDs going into ISAs for the kids which can't be withdrawn until they're 18. Its true the DDs were only for a pound each, but it added up pretty quick and tesco will now be losing a fairly big pot. As now they have stopped DDs, I will transfer the ISA to another provider; had the DDs continued, the entire amount would've remained with them so that the DDs would keep going.

    So they could've/should've left the DD facility for accounts where the money is tied up (and online only as per previous comment)
    Originally posted by chiefnoodle
    If everyone is doing it for a pound per direct debit, they are most likely transferring it back out that month too, so in reality people aren't actually holding much with them at all. They don't want the hassle of administrating customers who are putting in 2 or 3 a month with a balance of about 20. It's wasting their resources and affecting genuine customers.
    • Hattie625
    • By Hattie625 13th Apr 18, 2:40 PM
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    Hattie625
    Not another thread about this! Can't people keep it to one thread instead of keeping on creating threads on the same thing.

    I get why people are doing it (I wish I had that much time), but Tesco isn't there to facilitate you setting up Christ knows how many direct debits for 1 each just to keep your perks with current accounts with other banking providers. It is a waste of their time and resources to administrate those countless accounts. As a result, those who are genuinely using this account as a savings account are now being affected by those who are kinda abusing the system (again, i do get why people were doing it) and that is usually what happens. The few are affecting the many.
    Originally posted by aj23
    If someone is genuinely using the Tesco Internet Saver as a savings account, they are unaffected by the change except that (if they are making deposits by direct debit) they will have to change to standing order or another method of deposit.
    • aj23
    • By aj23 13th Apr 18, 2:40 PM
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    aj23
    I completely agree and people doing 1 dd's were being ignorant blockheads. If that hadn't been going on it might have lasted longer.

    That said, if it is possible to take the p iss then humans always will and imo it would have been pulled eventually anyway.
    Originally posted by fun4everyone
    Completely agree with you and YorkshireBoy.
    Last edited by aj23; 13-04-2018 at 2:43 PM. Reason: typo
    • aj23
    • By aj23 13th Apr 18, 2:42 PM
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    aj23
    If someone is genuinely using the Tesco Internet Saver as a savings account, they are unaffected by the change except that (of they are making deposits by direct debit) they will have to change to standing order.
    Originally posted by Hattie625
    But if they do happen to have direct debits coming in, which the account does (did) allow from the start and that is why they partly opened it, they now can't do that in good faith. Changing to standing order means they aren't protected by the direct debit guarantee scheme. The customer becomes personally liable for a standing order not going through and not the organisation who set up the direct debit.
    • YorkshireBoy
    • By YorkshireBoy 13th Apr 18, 2:43 PM
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    YorkshireBoy
    As a result, those who are genuinely using this account as a savings account are now being affected
    Originally posted by aj23
    Funding a savings account by direct debit when you don't have to would be pretty foolish. Funding by FP would get you 2 - 6 days (edit: 7 days worst case) more interest on every deposit you make.


    It's therefore a great move for genuine (but not lazy) customers...since they'll make more money!
    Last edited by YorkshireBoy; 13-04-2018 at 3:03 PM.
    • fun4everyone
    • By fun4everyone 13th Apr 18, 2:46 PM
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    fun4everyone
    I wonder how much a DD costs the organisation that pulls the money?

    Probably there are different costs depending what the money is being pulled for but this was certainly costing Tesco money overall.
    • aj23
    • By aj23 13th Apr 18, 2:47 PM
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    aj23
    Funding a savings account by direct debit when you don't have to would be pretty foolish. Funding by FP would get you 2 - 6 days more interest on every deposit you make.


    It's therefore a great move for genuine (but not lazy) customers...since they'll make more money!
    Originally posted by YorkshireBoy
    I didn't say funding it, I said who use it as a proper savings account but may happen to have inward direct debits (it may be a payment from someone else who isn't the account holder).

    A direct debit goes out and goes through the same as a FP does, so 'extra' interest would be negligible.
    • aj23
    • By aj23 13th Apr 18, 2:50 PM
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    aj23
    I wonder how much a DD costs the organisation that pulls the money?

    Probably there are different costs depending what the money is being pulled for but this was certainly costing Tesco money overall.
    Originally posted by fun4everyone
    Someone somewhere is shouldering the cost. That's what I was saying about the time and resources it takes to administrate these pointless direct debits.
    • Hattie625
    • By Hattie625 13th Apr 18, 2:51 PM
    • 704 Posts
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    Hattie625
    I didn't say funding it, I said who use it as a proper savings account but may happen to have inward direct debits (it may be a payment from someone else who isn't the account holder).

    A direct debit goes out and goes through the same as a FP does, so 'extra' interest would be negligible.
    Originally posted by aj23
    An inward direct debit from a current account which is not a/the nominated account in the name of the IS account holder would not be accepted.
    • eskbanker
    • By eskbanker 13th Apr 18, 2:52 PM
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    eskbanker
    But if they do happen to have direct debits coming in, which the account does (did) allow from the start and that is why they partly opened it, they now can't do that in good faith. Changing to standing order means they aren't protected by the direct debit guarantee scheme. The customer becomes personally liable for a standing order not going through and not the organisation who set up the direct debit.
    Originally posted by aj23
    But in the case of funding a Tesco savings account by DD, you're paying money to yourself (and had to declare that the DD was from a linked account in your name) so the guarantee scheme is irrelevant!
    • fun4everyone
    • By fun4everyone 13th Apr 18, 2:54 PM
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    fun4everyone
    This lot here

    https://fastpayltd.co.uk/direct-debit-solutions/pricing/

    Are charging 10-50p per direct debit.

    So Mr Partington who has 12 monthly dd's of 1 to satisfy all his rewards hunger is costing tesco between 1.20 to 6 per month. No doubt he snap transfers the 1s all back out again immediately so the whole thing is completely worthless to Tesco.

    How many people were doing this? Since it was all over this website it must have been costing a fortune imo.
    • YorkshireBoy
    • By YorkshireBoy 13th Apr 18, 2:55 PM
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    YorkshireBoy
    A direct debit goes out and goes through the same as a FP does, so 'extra' interest would be negligible.
    Originally posted by aj23
    You instruct your bank to send an FP to Tesco savings the day before Good Friday and it earns interest at Tesco from that day.

    You instruct Tesco to pull funds from your current account via direct debit on the same day before Good Friday and the funds will start to earn interest at Tesco from the following Wednesday. Ergo you've lost 6 days interest. Make the Tesco request on Thursday evening, ie after their cut-off, and you're looking at the following Thursday, ie 7 days lost interest. I wouldn't call that "negligible". Indeed, it takes us back years to the 5% ING Direct savings accounts when you had to plan ridiculously far ahead at Easter and Xmas, let alone each and every weekend throughout the year.

    Remember, we're talking about "genuine customers" here, not abusers.
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