Questions of Cash: Problems with 'dormant' direct debit ended 20 years of faultless banking
Saturday 19 November 2011
Q. I have had several problems with Barclays this year, after more than 20 years of faultless banking. One outstanding problem is that this summer I used my Co-operative Bank credit card for the first time for some months. I had a direct debit set up to automatically pay the minimum amount. Unknown to me, this had expired. Barclays refused to make the payment for two months in a row and failed to tell me. I was charged two months' non-payment by the Co-op until I spoke to them and they lifted the charges.
The Co-op told me to speak to Barclays about the problem: Barclays told me the Co-op had cancelled the direct debit the day before the payment was due to be processed. I spoke to the Co-op again, who said this was untrue and they didn't have the authority to do this anyway. The Co-op has agreed to explain the situation to the credit reference agency if Barclays will provide a note of explanation – which they promised to provide, but have not done so. NS, London.
A. Your experience should be a warning to all occasional users of credit cards. Banks must comply with a "dormancy" rule. Any direct debit not used for a period of 13 months – either from the date of a lodgement, or from the date of last payment – is made dormant and removed. This is for customers' security, reducing the risk of fraud or error. In your case, the direct-debit mandate was made dormant because it had not been used for 22 months. Barclays says that the responsibility for notifying a card user that a direct debit has gone dormant lies with the originating bank, not the payer's bank. A spokesman for Barclays says: "All direct-debiting companies are aware of this rule and of the need to set up a new mandate if required. After a mandate has expired and been removed, should the company claim payments, these will be automatically returned as 'no instruction held'." We have asked The Co-operative Bank to ensure that there is no remaining adverse entry on your credit reference report.
Q. In June my aunt was to transfer £500 via internet banking to my Santander current account. I mistakenly got two digits wrong when reading out my account number from my cheque book. Two days later I realised the account had not been credited and the reason for this. My aunt inquired and was told the transfer had already been processed and it was too late to recall. When I spoke to my branch manager I was told that even though they knew whose account had been wrongly credited, the bank was not prepared to contact the account holder either to request a refund, or even to explain what had happened. I cannot believe that banks are not required to cross-reference the account number with the account holder's name when processing transfers. SS, Hastings.
A. Yours has become a common experience and is a frequent cause of complaints to Questions of Cash. As this column has stressed on several previous occasions, it is essential to take great care when making electronic payments to provide the correct details – and to do the same when advising another person of account details for a transfer. Banks no longer check account numbers against the names of account holders when processing electronic payments. If the transfer goes through wrongly, you may lose the funds. In this case, Santander has taken pity on you. A spokeswoman for Santander says: "Due to the circumstances of this case, we have agreed to make a goodwill payment of £500 to [the reader]. We urge customers to use care when transferring funds online and stress that there was no Santander error in this case."
Q. I have purchased an annual station parking permit from Meteor Parking, costing £200 a year, to be allowed to legally operate from a taxi rank in southern England. Although I have a permit, there is a lack of enforcement to prevent others plying for hire without paying the permit and stealing business from those of us who have paid. I have contacted Meteor Parking several times, without success. They just say that they provide staff to enforce the rules. MM, southern England.
A. Meteor Parking has now discussed your problem with you in more detail and promises to take the necessary action. It has provided you with a phone number to report any cars seeking trade without the necessary permit. A spokesman for Meteor says: "We work closely with Southeastern [Railway] to monitor taxis trading at its stations and have implemented a permit system whereby only taxis with a valid permit are able to trade. Taxi drivers who are found to be operating at Southeastern stations without a permit risk a parking charge notice of £90 and prosecution. We frequently visit the stations to avoid abuse of the system."
Q. The Co-operative Bank has caused me repeated problems this year. It has failed to update its records with my current phone number; it has not provided the Co-operative Group membership dividends I am due; and it failed to process a payment to a health insurer, causing the policy to lapse. NL, Philippines.
A. Unfortunately, your complaint has been ongoing for several months. During this time, we became mere observers, copied into emails between yourself and the bank. These suggested differences of opinion of fact, but also that the bank repeatedly missed agreed deadlines for resolving aspects of a complicated complaint. Eventually we intervened again, with a request that the matter be resolved immediately – it then was. A spokesman for The Co-operative Bank says: "This was a detailed and in-depth complaint with a number of aspects. Unfortunately, there have been some delays in us responding and we accept that it could have been handled better. We have apologised to [the reader] and as a result of any inconvenience caused credited his account with £300."
Questions of Cash cannot give individual advice. But if you have a financial dilemma, we'll do our best to help. Please email us at: email@example.com.
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