Change in Direct Debit Timings due to SEPA

cregganna

Hi All,

Just a heads up that there has been a recent change in AIB's Direct Debit policy as part of the SEPA transition.

I usually clear my Credit Card every month by AIB online banking about 3 working days before the Payment Due Date but I have a Direct Debit set up that will take the minimum payment if I miss the date. It would previously kick in on or maybe the day before.

With the last bill, despite making full payment on the 4th of Febuary for the due date of the 12th, AIB still took the minimum payment on the 12th.

Long conversation on the phone but in summary, this is due to AIB's DD "Raise Date" being changed to 7 working days before due date because of the latest SEPA changes. Am not happy with the idea of paying my VISA bill 7 working days in advance so have cancelled the Min payment DD catch payment. Shame as it was a good safety net.

I'm sure that this will effect other people so here is some documentation I found online - it doesn't quite match what was said to me on the phone.

See: http://business.aib.ie/help/sepa-faq

SEPA Direct Debits
How long will it take to collect on a SEPA Direct Debit (i.e. clearing cycle)?
AIB’s clearing cycle for a SEPA Direct Debit (SDD) is six AIB banking business days prior to the collection date on a first payment presentation and three AIB banking business days prior to the collection date on a recurring payment. This represents a substantial change from the clearing cycle of EMTS (Electronic Money Transfer System) Direct Debit payments, which have a life cycle of one working day.

ardmacha

This is what passes for "progress" and "service" from the banks.
I'd suggest the OP consider leaving the DD and paying off the balance -min balance earlier if he/she wishes.

wmpdd3

He could buy he may as well have no interest free period.

BazzaDP

The amount to be debitted has to be sent to the bank 3 days in advance (6 days for the first time). This is in top of any processing time the company itself takes to calculate and process amounts. It is still taken from your account the same day so you are not paying in advance.

This does mean, however, that if your DD amount changes in that time period, then the old amount will still be collected. This is especially bad for the first SEPA collection as, including weekends, it's now a very long time so chances of this are likely.

I agree this is a step backwards. You would think it would take LESS time after all the hassle and set up SEPA has taken.

To be honest I don't see many benefits from SEPA (Europe wide, better consumer protection for refunds) compared to the downsides (this extra delay, the time, hassle and cost it's taken to implement, the mistakes made during that implementation were people's collections were missed, the fact people need to give much longer details (8 digit BIC and 22 digit IBAN as opposed to 6 digit sort code and 8 digit account code)... etc.).

Yggr of Asgard

BazzaDP wrote: »

To be honest I don't see many benefits from SEPA (Europe wide, better consumer protection for refunds) compared to the downsides (this extra delay, the time, hassle and cost it's taken to implement, the mistakes made during that implementation were people's collections were missed, the fact people need to give much longer details (8 digit BIC and 22 digit IBAN as opposed to 6 digit sort code and 8 digit account code)... etc.).

I like SEPA as it allows me to start moving my DD to my better serviced German account (no fees, no ATM fees worldwide, better online banking, miles earning credit cards, etc.).

SEPA also allows me to see when a direct debit is due before it's actually due so that I can take action if it's wrong. My bank account shows a direct debit as "advanced notification" days before it's due which is good especially for those which have different values.

Sure I have to spell out an IBAN and BIC and during the initial implementation (as with any system) errors were made.

Sure loads of Irish businesses don't want to set up DD on non-irish bank accounts or are demanding unneeded documents (like AnPost) to make it harder on customers but I don't care, I fill out the forms and am happy.

Once this has settled and banks are going to start selling cross Europe this is going to benefit customers. The amount of € I saved by having free world wide ATM withdraws is well worth the hassle of having a bank account in Germany.

BazzaDP

Maybe you're right and this will open up markets and competition (and the Irish banking system is badly in need of a shake up they might bring). And most of my moans are short term ones that we're get over as we get used to it. But this 3 day/6 day delay really is a stupid step backwards in this day and age.

Toots

I got badly caught out by this and I'm with BOI, same thing happened as with the OP, my credit card bill came out 3 days earlier than it usually does and put my account into overdraft. I set my direct debit to come out the day after I get paid so I know there'll always be funds to meet it. However this seeing as it came out two days before payday this time I was down to my last few quid and it left me with literally no money to buy food, which meant that myself, hubby and son had to eat dinner at my parents for a few days. I only found out what had happened when I rang credit cards to see why they took the payment early.

Honestly, would it have been that difficult for the various banks to put either a little info leaflet in with the statements before this came into effect? Something short, sweet and to the point, not a novel condensed into tiny print which nobody ever reads.

bkehoe

This just happened me with AIB. Have direct debit set for 50% of total in case I forget to pay it manually. Every month I pre-program a payment to be activated 2 days before the due date (20th) and have never missed a single payment in 10 years of having credit cards with AIB.

I get paid on the 15th, so upon receipt of my pay I calculated how much needed to be in my current account for bills, etc, and shuffled the rest off to my 7 day notice savings account and to my UK account (live in the UK).
So on the 18th the money left my current account and is registered on my Visa statement as 'Payment Thank You' also on the 18th.

Then this morning when just checking my account I realised that the direct debit came out putting the account it comes from with a huge debit balance and a referral fee.

Attempted to call the branch first as I've many years good history (never been over any authorised overdrafts, etc) with my bank manager as I've several accounts, and business accounts, but AIB have a new phone system that stops one from actually contacting anyone in your branch now.
The person on the end of the phone sounded really unprofessional and it took me 5 minutes of listing dates and transactions before he finally realised the direct debit shouldn't have been taken.
Now a request has been sent to a refunds department to return the money but the agent had no idea how long it would take and wouldn't issue me with any kind of written apology admitting their error and provided ambiguous assurances that the fees and potential interest charges would be refunded.
This would be a shocking situation for someone to be in if they didn't have access to any other funds and they didn't care in the slightest.

Only after I threatened to take my business elsewhere and remind him of my payment history did they agree to cancel the direct debit.

Does anyone know if my credit history gets affected by unauthorised overdraft use and the referrals?

delly

No effect on your history at all, all that happens is you are charged for the referral and then charged interest on the amount that went into overdraft.

BazzaDP

SEPA shouldn't change WHEN a direct debit is withdrawn, it should only change the notice the companies need to give to the bank each month before they withdraw the money. If you've agreed a collection date with a company they should still respect that date.

Sounds to me like a screw up in the conversion of the DIrect Debits to SEPA by whoever owns the direct debit (the credit card company I presume?).