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    • 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 2
    • aj23
    • By aj23 13th Apr 18, 3:01 PM
    • 400 Posts
    • 152 Thanks
    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!
    Originally posted by eskbanker
    But you're instructing your bank to authorise it, it's your bank who will take the money and send it to who it is going to. If something goes wrong, it's not always you who would be responsible.

    In December, Telefonica didn't take my direct debit. They gave me a week to pay or face late payment charges. Little difficult as I was in the South China Sea with weak GPS. I didn't see the email straight away, and managed to get a strong enough connection to the day before it was due to pay by credit card. They said it was the bank, but when I got home I went into branch (they have their uses) and they said that it wasn't taken then returned, so it wasn't the bank's fault, it was Telefonica. If it was the bank, it would have been taken then returned as the bank would have stopped it. The bank confirmed that no attempt had been made to take it.
    • eskbanker
    • By eskbanker 13th Apr 18, 3:01 PM
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    eskbanker
    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.
    Originally posted by fun4everyone
    We're all just speculating but personally I'm unconvinced that their move was (exclusively) to do with the value of the DDs and could equally have been down to the volume, i.e. people with DDs set to pull from multiple different current accounts, which is obviously an artificial process exploiting a loophole, regardless of whether they were 1, 10, 18.37 or 100, rather than the pattern of a genuine saver.

    Having said that, it would have been straightforward for them to have closed off either such loophole (value or volume) without withdrawing the entire facility so I still believe there are other drivers for their actions....
    • eskbanker
    • By eskbanker 13th Apr 18, 3:06 PM
    • 7,122 Posts
    • 7,541 Thanks
    eskbanker
    But you're instructing your bank to authorise it, it's your bank who will take the money and send it to who it is going to. If something goes wrong, it's not always you who would be responsible.

    In December, Telefonica didn't take my direct debit. They gave me a week to pay or face late payment charges. Little difficult as I was in the South China Sea with weak GPS. I didn't see the email straight away, and managed to get a strong enough connection to the day before it was due to pay by credit card. They said it was the bank, but when I got home I went into branch (they have their uses) and they said that it wasn't taken then returned, so it wasn't the bank's fault, it was Telefonica. If it was the bank, it would have been taken then returned as the bank would have stopped it. The bank confirmed that no attempt had been made to take it.
    Originally posted by aj23
    Yes, I understand the significance and importance of the direct debit guarantee scheme for 'real' DDs but am just observing that it's not relevant to the scenario of using DDs to transfer money between one's own personal current and savings accounts.
    • eskbanker
    • By eskbanker 13th Apr 18, 3:30 PM
    • 7,122 Posts
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    eskbanker
    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.
    Originally posted by fun4everyone
    If you're seriously trying to suggest that the cost to Tesco Bank of internally processing direct debit payments bears any resemblance to the prices charged by a small independent provider to other small businesses then I think you need to learn more about the economies of scale!

    However, the underlying point remains valid, i.e. that there will be some sort of cost involved....
    • EachPenny
    • By EachPenny 13th Apr 18, 4:00 PM
    • 4,948 Posts
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    EachPenny
    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.
    Originally posted by YorkshireBoy
    It doesn't help that they seem to think it necessary to include a FSCS Information Sheet with every statement they post out, and that each account's statement has to come in a separate envelope.
    "In the future, everyone will be rich for 15 minutes"
    • 2010
    • By 2010 13th Apr 18, 4:12 PM
    • 4,188 Posts
    • 3,339 Thanks
    2010
    I thought Tesco had given the reason when it first gave notice last Oct and again this March and yet again two days ago by letter and yesterday by email.
    • veryintrigued
    • By veryintrigued 13th Apr 18, 4:20 PM
    • 2,370 Posts
    • 1,784 Thanks
    veryintrigued
    ************************what???******************* **

    **************tescos are ending their dd facility?*********

    why has this not been communicated or discussed on here?

    • Hattie625
    • By Hattie625 13th Apr 18, 4:47 PM
    • 714 Posts
    • 572 Thanks
    Hattie625
    It doesn't help that they seem to think it necessary to include a FSCS Information Sheet with every statement they post out, and that each account's statement has to come in a separate envelope.
    Originally posted by EachPenny
    I have always assumed that the FSCS info sheet with every statement, account opening confirmation letter etc etc is a regulatory requirement and not something which Tesco chooses to do. The statement dates for separate accounts will not usually coincide, so the separate mailings may not be possible to avoid.
    • mollycat
    • By mollycat 13th Apr 18, 5:04 PM
    • 1,043 Posts
    • 2,068 Thanks
    mollycat
    ************************what???******************* **

    **************tescos are ending their dd facility?*********

    why has this not been communicated or discussed on here?

    Originally posted by veryintrigued
    I've got more bad news for you.....

    John Lennon's dead!
    • Westie983
    • By Westie983 13th Apr 18, 5:21 PM
    • 4,333 Posts
    • 14,890 Thanks
    Westie983
    I thought Tesco had given the reason when it first gave notice last Oct and again this March and yet again two days ago by letter and yesterday by email.
    Originally posted by 2010
    Dont forget the notice you see when you log into internet banking too....

    Westie983
    Save 12k in 2018 #10 Total (25,000)+10,000/12,000 = 83.33%
    Sealed Pot Challenge ~ 11 #97 Total (410) + 40/500 = 8.00% ( x 11)
    Xmas 2018 1 a Day #2 Total 62.59/365 = 17.14%
    Virtual Sealed Pot #1 Total 750/1,000 = 75.00%
    2 Savers Club 2018 #16 Total (1,500)+-480/2,000 = 51.00%

    Total 11,872.59/15,865 = 74.83%

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