Bank forced through a direct debit for themselves.

Pacing Mule

Bit of a complicated one but in summary we have been on an interest only payment on our mortgage for the past 6 months - agreed by the bank after redundancy and personal circumstances went sour. The interest only period was due to expire and we applied to the bank for an extension. During the application process we recieved written notice that the interest only period had expired and that the next payment would be for the full amount. However we were then verbally told by the branch manager that the mortgage department had agreed a reduced payment for a further six months. All we had to do was sign some paperwork which for speed reasons we signed in our local branch rather than in the branch our mortgage is with.

Roll on a few days and we find the full payment has been taken from our account - putting the account into an unathorised overdraft. When queried we were told that the paperwork did not reach the mortgage department in time and that the 6 month agreement would start from next month.

In the mean time we have been left with an unauthorised overdraft, a referral fee for the direct debit which placed the account in the overdraft (agreed to be refunded by the bank manager) a minus balance in the account meaning that the next direct debits due from the account will bounce - also with referral fees etc (too late to change them as process has already started) and the reality that in a months time when the mortgage department come looking again we will most likely still have an unathorised overdraft to have fees heaped upon.

Bank manager says they cannot reverse the transaction and that the best thing we can do is lodge cash in to cover the now overdrawn account (missing the point completely that we are not exactly flush at the moment) My question is this. Can the bank force through a direct debit just because it suited them ? If it was the ESB or Gas bill they would simply have refused it full stop. Secondly the direct debit mandate system allows for reversals to be forced through if the agreed amount is exceeded. We're in a grey area on this one as what is the agreed amount ? Is it from the letter advising of the full payment to be taken , the originally agreed amount for the mortgage or can we argue that it is the verbal instruction of the branch manager that a new payment figure had been agreed.

Anyone have any experience or pointers from similar issues ? Is there a mechanism we can appeal to that will force the bank to reverse the direct debit. I'm more inclined to be a little behind in the mortgage versus having an overdraft that will cripple us with punitive interest etc.

sarahlulu

Unfortunately until all the paperwork is in place, the correct amount is the full repayment. It is at the banks discretion as to whether to pay the direct debit, causing you to go overdrawn, or return it unpaid, causing you to pay an unpaid fee and go into arrears on your mortgage.