Bank paying cancelled Direct Debit

PurpleBerry · 22-01-2009 11:41am #1

I just found out that my old bank have been continuing to honour a Direct Debit that I cancelled in July! The account is very overdrawn as I have been charged bank fees for the lack of funds for the Direct Debit and interest on top of the charges.

I haven't used the account since August except for one transaction in September due to a previous employer depositing funds into that account instead of my new acccount with a different bank. Is there any hope of the bank admitting their mistake and calling off the fees, charges and interest? Or will I be out of pocket for their mistake?

Xcellor · 22-01-2009 1:18pm

All you can do is ask the question. I recently got issued a new credit card since my other one was used in fraud. I asked for DD to be set up and they didn't. The first month I was charged a late payment fee. I phoend up and complained. It was dropped and I was told everything was OK and the DD would be set up. Guess what, same thing happened this month. So I complained again and was told everything is OK and the fee was waived again... Banks are incompentent at the best of times :S

Jet Black · 22-01-2009 8:17pm

If you canceled it with you bank you will be refunded any fees. What you do is go into the bank and tell them you stopped the DD with them in July and despite this the money was still taken out. Since then you have been charged overdraft interest and whatever fees. Say you want the fees refunded. You will have to go to where the DD was paid to get the money you paid back.

GerardKeating · 22-01-2009 8:43pm

heymcflyx wrote: »

You will have to go to where the DD was paid to get the money you paid back.

Nope, that's the banks job, they were instructed to stop the DD and they did not.

stepbar · 22-01-2009 8:44pm

This wrecks my head.

If you setup a D/D the contract is between YOU and the SERVICE PROVIDER not THE BANK. You MUST contact the service provider FIRST and confirm that THEY have cancelled the direct debit. There's nothing stopping them from attempting to setup the DD again, especially if it's Originator Plus. They can setup the DD from their own offices bypassing the bank altogether. If I had an eur for everytime someone said to me "The bank took my money". No. your service provider took your money, we facilitate the payment based on an instruction from yourself that you provided to your service provider.

KillerShamrock · 22-01-2009 9:29pm

+1 on that stepbar.

First thing you should do is make sure if it was a DIRECT DEBIT OR STANDING ORDER everyone mixes these up

The agreement for a direct debit is between you and the company the bank only facilitates the transfer of the money between the accounts. So really they don't have to give you anything back to be honest.

Now if its a Standing order which is between you and the bank and the bank didn't cancel it thats an altogether different story then they will most likely have to give you money back

Jet Black · 22-01-2009 10:45pm

GerardKeating wrote: »

Nope, that's the banks job, they were instructed to stop the DD and they did not.

I tried ringing Quinn Direct/NTL/Hibernian/Credit Union on behalf of a pissed off customers. I knew before picking up the phone what they where going to say. Under data protection they can not give customers details to anyone but that customer. I said to them I am from bank x. But at the end of the day I could be anyone. So in the end the customer had to ring. Although according to 90% of the customers I dealt with any third party taking money from there account is my problem.

dotsman · 23-01-2009 12:15am

Neesa wrote: »

I just found out that my old bank have been continuing to honour a Direct Debit that I cancelled in July! The account is very overdrawn as I have been charged bank fees for the lack of funds for the Direct Debit and interest on top of the charges.

I haven't used the account since August except for one transaction in September due to a previous employer depositing funds into that account instead of my new acccount with a different bank. Is there any hope of the bank admitting their mistake and calling off the fees, charges and interest? Or will I be out of pocket for their mistake?

Hi Op,

as per the last few comments (which are correct, compared to the first few) a Direct Debit is between you and the company. The bank are merely facilitators. When you say you canceled the DD in July, did you do so in writing? You will need to contact whatever company has been taking your money and get them to refund you. You should also pursue them for all the fees and surcharge interest. If they are unwilling, well - that's what the small claims court is for.

As for you bank, did you ask them (in writing) to stop the DD? If not, then do so now. Direct Debits should always be canceled on both ends.

Name and shame the company:D?

PurpleBerry · 23-01-2009 12:31am

Thanks for the replies. Dotsman I didn't cancel the in writing, I cancelled it using online banking. And will never make that mistake again.

There is little to no chance of the company refunding the payments, the way they surely see it is I was paying the fee, I was free to use their services. It's doubtful the fact that I wasn't will come into it. I'm sure as far as they're concerned I was free to do so.

IsThatSo? · 23-01-2009 11:16am

It probably was cancelled using the online banking, but that would only cancel it on the banks end. If the company thought that was an error, having not gotten any communication from you, they could have set it up again, as stated by a PP!!!

This is directed at people in general, not the OP - when cancelling a DD you should ALWAYS keep a copy of the letter that you sent by registered post. Staple the receipt to the copy of the letter and keep it for a long time. It will cost a little, but save you a lot of hassle in the long run as it will be your only comeback. Companies mislay/misfile stuff all the time. Then cancel it with the bank also, advising them you have cancelled it with the originator.

athtrasna · 31-01-2009 12:28am

All direct debit mandates to be signed should feature the line "I will inform Company X and the bank in writing in good time should I wish to cancel this instruction" or words to that effect. You would have signed this and then not completed your part of the contract.

Bottle_of_Smoke · 31-01-2009 2:40am

stepbar wrote: »

This wrecks my head.

If you setup a D/D the contract is between YOU and the SERVICE PROVIDER not THE BANK. You MUST contact the service provider FIRST and confirm that THEY have cancelled the direct debit. There's nothing stopping them from attempting to setup the DD again, especially if it's Originator Plus. They can setup the DD from their own offices bypassing the bank altogether. If I had an eur for everytime someone said to me "The bank took my money". No. your service provider took your money, we facilitate the payment based on an instruction from yourself that you provided to your service provider.

That's not completely true. You sign a DD to allow the bank to allow them to take money from your account. When I worked in boi the only time this happened was when a customer cancelled it with the company without cancelling it with the bank. Some companies will make an error & not cancel it. Any time I've cancelled a DD with my bank the company have then approached me looking for a new signature.

stepbar · 31-01-2009 5:44pm

Bottle_of_Smoke wrote: »

That's not completely true. You sign a DD to allow the bank to allow them to take money from your account. When I worked in boi the only time this happened was when a customer cancelled it with the company without cancelling it with the bank. Some companies will make an error & not cancel it. Any time I've cancelled a DD with my bank the company have then approached me looking for a new signature.

It is true. There are lots of direct debits that don't appear on bank systems. The only place you see them is on your statement. It's not always possible to cancel Originator Plus D/D's from the bank side in writing (not enforced a lot of the time). Hence best practice is to approach the service provider first. They may not allow you to cancel, as in the case of Bord Gais for fear you would run up a large bill and not pay (not that that would you stop you either but anyhow it's added protection of sorts).

Bottle_of_Smoke · 01-02-2009 4:08pm

What kind of DDs would these be? I was working three years managing direct debit payments & I never once came across a situation where the bank cancelled a DD & it still went through

stepbar · 01-02-2009 9:09pm

stepbar wrote: »

There are lots of direct debits that don't appear on bank systems.

....in the first place.

nlgbbbblth · 01-02-2009 11:26pm

The problem lies with the originator, not the bank.

The originator has complete control over the process - when you sign a direct debit mandate you are giving them this control.

The solution is not to have any direct debits.

Pay bills by credit transfer / internet banking / telephone banking / even post the company a cheque.

That way you have complete control.

Direct debits destroy lives and families.

Jagan · 03-02-2009 2:04pm

nlgbbbblth wrote: »

The problem lies with the originator, not the bank.

The originator has complete control over the process - when you sign a direct debit mandate you are giving them this control.

The solution is not to have any direct debits.

Pay bills by credit transfer / internet banking / telephone banking / even post the company a cheque.

That way you have complete control.

Direct debits destroy lives and families.

Absolutely true... unfortunately we learn by hard way.

I experienced the same problem with BOI recently. Cancelled the DD online and cancelled DD with Ark Life thro' fax. Both of them didn't bother cancelling it properly. Arklife took the money as usual, even after i followed up the fax to cancel.
When i talked to BOI, it came clear that there is no way we can cancel the DD with Bank. It has to be done with the company you signed up. Whenever the company asks for money, Bank will honor that...!!?!?! So, the company will have more control over DD than we might have.... sounds great, isn't ..!!! :mad::mad::mad: And BOI was saying by cancelling DD online doesn't really mean anything and they couldn't answer to me why they give the option to cancel DD online.

It's frustating to know finally you don't own your money and Banks and mismanaged companies can play with it as they like it... to all means the law will very well protect those than the people.:mad:

The only option left out is to close the account with that bank and open a new one with some one else... Don't know, they might still chase...!:mad:

Bottle_of_Smoke · 04-02-2009 11:19pm

stepbar wrote: »

....in the first place.

I'll take your word for it.

Kind of off topic, buy why is this allowed? Surely its a great opening for fraud, and I trust my bank a lot more than most companies, would much rather cancel it at that end

stepbar · 05-02-2009 12:52am

Bottle_of_Smoke wrote: »

I'll take your word for it.

Kind of off topic, buy why is this allowed? Surely its a great opening for fraud, and I trust my bank a lot more than most companies, would much rather cancel it at that end

Not everyone gets Originator Plus status. I'm not saying it happens on every occasion but it does happen. Did you know direct debits can be taken from a credit card? This sort of d/d won't appear on any bank system and is only run on a batch basis from the service supplier.

dotsman · 05-02-2009 1:13am

OP, I've just been thinking about this and the company who was continuing to charge where definitely in breach of the Direct Debit Scheme.

Under the scheme, the originator (ie the company who's charging you) must notify you in advance (14 days for DD, 7 days for DD+) prior to each transaction. If this has being going on since July (do you ever read your statements:)?), then I assume that you haven't received a single notification.

IPSO are the crowd in charge of all this, so you can cc all complaints by them (not sure if it will do any good, but it should!).

One final thing regarding people saying that the bank can't do anything. I'm not sure of the physical procedures that the bank(s) use, but according to IPSO, the bank should have caught this if she canceled it in writing. But again, the main focus is between the payee and the originator (with the bank supposed to offer a last resort).

I love the Direct Debit Scheme (in theory). It's just that so many companies abuse it, and the banks don't seem to want to get too involved when things go wrong.

Jagan · 05-02-2009 11:25am

dotsman wrote: »

OP, I love the Direct Debit Scheme (in theory). It's just that so many companies abuse it, and the banks don't seem to want to get too involved when things go wrong.

I liked it too so many year, until when there is a conflict. As you said Banks provide no support in that situation. Better off without DD... currently, in the process of cancelling all the DDs and moving them to Standing Orders.

Scuba_Scoper · 07-02-2009 2:23am

Sooo much factually incorrect 'advice' in this thread :rolleyes:

Have a quick read of this page from IPSO:

http://www.ipso.ie/index.php?Itemid=172&id=35&option=com_content&task=view

Once you have cancelled the Direct Debit with your bank, your liability for payments to the Originator via the Direct Debit scheme ends.

In your case, the relevant paragraphs are;

The payer can cancel or amend the Direct Debit instruction at any time by informing their Bank in writing. They can also inform the Originator. All correspondence should be retained.

The payer’s Bank will then inform the Originator of the cancellation or amendment.

If the instruction is cancelled no further collections are permitted.

If it is established that an unauthorised Direct Debit was charged to a Payer’s account the Payer is guaranteed a prompt refund by their Bank.

Standing Orders are not a replacement for payments that are variable. e.g Utilities bills etc.

nlgbbbblth · 07-02-2009 1:49pm

Scuba Scoper
Theory vs reality. It is not as clear cut as just quoting IPSO's procedures.

The ideal replacement for direct debit is NOT standing order but by paying it yourself - as I said in post #16.

Worst I have ever seen is a gym present a direct debit comprising two full years membership on an account that was cancelled some weeks beforehand. Cleaned out the person's account on the day of his father's funeral.

He went to pay the local hotel by laser for the food they put on for mourners only to have the transaction rejected for lack of funds. Not the sort of hassle you want at such an emotional time.

He got a refund the following week - fairly prompt - but that's not the point.

Scuba_Scoper · 07-02-2009 2:42pm

Quoting IPSO procedures was to point out information to readers who may not know the process to follow if there is a DD dispute.

Jagan in the post above mine stated he was canceling his DD's an changing to S/O which i why I said;
Standing Orders are not a replacement for payments that are variable. e.g Utilities bills etc.

The "worst you have ever seen" shows that the disputes procedure is working as intended.

kaiser sauze · 21-02-2009 1:50pm

nlgbbbblth wrote: »

The problem lies with the originator, not the bank.

The originator has complete control over the process - when you sign a direct debit mandate you are giving them this control.

The solution is not to have any direct debits.

Pay bills by credit transfer / internet banking / telephone banking / even post the company a cheque.

That way you have complete control.

Direct debits destroy lives and families.

I must agree with your pessimism about direct debits. I cancelled all mine, apart from two, a couple of years ago. If a company wants my business, I pay by cheque or EFT.

Scuba_Scoper wrote: »

Sooo much factually incorrect 'advice' in this thread :rolleyes:

Have a quick read of this page from IPSO:

http://www.ipso.ie/index.php?Itemid=172&id=35&option=com_content&task=view

Once you have cancelled the Direct Debit with your bank, your liability for payments to the Originator via the Direct Debit scheme ends.

In your case, the relevant paragraphs are;

The payer can cancel or amend the Direct Debit instruction at any time by informing their Bank in writing. They can also inform the Originator. All correspondence should be retained.

The payer’s Bank will then inform the Originator of the cancellation or amendment.

If the instruction is cancelled no further collections are permitted.

If it is established that an unauthorised Direct Debit was charged to a Payer’s account the Payer is guaranteed a prompt refund by their Bank.

Standing Orders are not a replacement for payments that are variable. e.g Utilities bills etc.

Thank you for bringing some sense into the thread. It melts my head when people are mislead about the direct debit scheme.

Bank paying cancelled Direct Debit

Comments