Direct debit conundrum

ligertigon

Hi All.
I have recently decided to pay home insurance via monthly installments.
All fine, have done this many times before.

Just got a letter from my bank, the day before the first payment is due...
The letter says; "The bank does not guarantee that payment will be made (outside of funds available) and accepts no liability for loss".

Now, failure to pay an installment brings up huge interest charges from the premium finance agency.

In other words, the whole setup is now COMPLETELY out of my hands whether a payment is made or not, even with funds present.

I am told this is unlikely to happen, but I am concerned...
comments advice?

draiochtanois

This post has been deleted.

ligertigon

Thanks, I phoned them to do so, they said will till the first payment comes out....
Just don't like being backed into a corner

coffeepls

I would've assumed that by that wording they are implying that the direct debit is done on the basis that funds are available in your account to facilitate this, and that if there is insufficient funds that they do not guarantee to cover the payment.
I remember once going over my overdraft by a small €10 and a direct debit was still paid by the bank despite the funds not 'being there'.
If I were you I would just ask them to clarify that wording. I think I may be right though. I have all my monthly bills including home insurance from AIB on direct debit.

coffeepls

I also think it means that it is your responsibility to ensure that it is deducted from your account (well that's not unusual) so that in the event of a claim, whereby it is hypothetically discovered that you never checked to see that the direct debit were going through, you can't blame the bank and claim that they should pay out because they didn't deduct from your account.
I honestly would not be so worried. Looks very normal to me.

ligertigon

Thanks. The funds available wont be an issue, I just don't like everything written, such that its all my fault if a payment is missed. Even though there is nothing I could do about it.
They could easily have worded it both sides less ambiguous, but why would they.

The banks have all had their various software issues etc lately,
So the next one that happens, and a payment is missed, I am penalised by the finance company with no acceptance of liability from the bank?
Am going to the Financial Services Ombudsman's for some clarification.

I understand coffepls about informing them etc, but for a €265 loan, a total repayment of €1700 is in the small print.:eek:

coylemj

ligertigon wrote: »

Thanks. The funds available wont be an issue, I just don't like everything written, such that its all my fault if a payment is missed. Even though there is nothing I could do about it.
They could easily have worded it both sides less ambiguous, but why would they.

The banks have all had their various software issues etc lately,
So the next one that happens, and a payment is missed, I am penalised by the finance company with no acceptance of liability from the bank?
Am going to the Financial Services Ombudsman's for some clarification.

I understand coffepls about informing them etc, but for a €265 loan, a total repayment of €1700 is in the small print.:eek:

What you quoted from your bank sounds like a typical disclaimer. What it simply means is that if the bank's computer breaks down and they are late in processing the DD, it's tough luck and you can't sue them. You can bet that every bank includes that type of disclaimer in their Ts & Cs and frankly I fail to see why you're getting so worked up about it.

You mentioned home insurance and then a 'premium finance agency' that you seemed pretty scared of - can you elaborate on the latter please.

If you were paying for a motor policy by DD and your bank had a delay in processing their direct debits, you would be in the same boat as thousands of others and all of the major insurance companies would be aware of it - do you think they're going to cancel several thousand policies because the premiums are a day late?

Instead of paying the whole premium upfront as advised, why not pay the premium monthly but a couple of days early?

ligertigon

coylemj wrote: »

What you quoted from your bank sounds like a typical disclaimer. What it simply means is that if the bank's computer breaks down and they are late in processing the DD, it's tough luck and you can't sue them. You can bet that every bank includes that type of disclaimer in their Ts & Cs and frankly I fail to see why you're getting so worked up about it.

You mentioned home insurance and then a 'premium finance agency' that you seemed pretty scared of - can you elaborate on the latter please.

If you were paying for a motor policy by DD and your bank had a delay in processing their direct debits, you would be in the same boat as thousands of others and all of the major insurance companies would be aware of it - do you think they're going to cancel several thousand policies because the premiums are a day late?

Instead of paying the whole premium upfront as advised, why not pay the premium monthly but a couple of days early?

Everything you said I agree with.

But when a disclaimer like that from the bank, is met with a threat from a finance company about late payments and interest charges., AND its all in writing, I have a huge problem about being legally backed into a corner.
I am worked up because its not a fair scenario.
They wont cancel thousands of policies, because the insurance broker is separate from the finance (premium finance agency)company managing the direct debits. ie collecting them on behalf of the insurance broker.

coylemj

ligertigon wrote: »

Everything you said I agree with.

But when a disclaimer like that from the bank, is met with a threat from a finance company about late payments and interest charges., AND its all in writing, I have a huge problem about being legally backed into a corner.
I am worked up because its not a fair scenario.
They wont cancel thousands of policies, because the insurance broker is separate from the finance (premium finance agency)company managing the direct debits. ie collecting them on behalf of the insurance broker.

You're paying for home insurance through a 'finance agency' who then pays it to a broker? Why don't you eliminate those middlemen and go direct?

Regardless of who you have your mortgage with, you are free to take out home insurance with any company you choose to. You shouldn't have to put up with threats when it comes to something as simple as paying for an insurance policy via DD.

ligertigon

coylemj wrote: »

You're paying for home insurance through a 'finance agency' who then pays it to a broker? Why don't you eliminate those middlemen and go direct?

Regardless of who you have your mortgage with, you are free to take out home insurance with any company you choose to. You shouldn't have to put up with threats when it comes to something as simple as paying for an insurance policy via DD.

You dont find out its with a finance company until after the insurance is taken out.
Anyway, the first payment went through today.
Am going to clear the balance next thursday as they advised to phone then.
I think this is a minefield for many yet to come...