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The terms of direct debit agreements are such that you are actually entitled to an immediate refund of any debit taken in error. Point that out to the bank, and demand that they refund the payment to you, plus the charge, then contact the beneficiary of the debit and ask why they took the payment so early, and indicate that in future if they do the same, you will have to refer them to the ombudsman for abuse of the direct debit system.

Maybe Dan should read some of the stories and understand how "acting responsibly" can actually lead to the bank taking the mickey... But in case he can't be bothered, here's my wife's latest run-in. Her first in 10 years of banking with RBS. Her current account had the proceeds of our house sale in, to cover the bills for getting the new house fixed up. Someone at the bank obviously decided they saw a commission opportunity, and sold her on a new savings account. They transferred all the proceeds into the new account, reassuring her "It's OK, you can get instant access." When she got home, she double checked the balance of her account, and realised that a hefty cheque for building work hadn't yet gone through, so phoned the bank to transfer the money back into the current account to cover it. "Sorry, because it's a brand new account it doesn't exist on our system yet, call us back tomorrow" When she got in from work the next day, she phoned the bank. The cheque had hit the account that day, so she asked to transfer the funds. And was told "Sorry, we can do that, but since it's now after 6.30, this cheque will show as taking your account into an unauthorised overdraft and you'll be charged." Yeah, cheers. So, Dan, what should she have done that was more responsible?

Thanks for your interest; "all the documents to hand" - not quite, as I've just moved house and everything is packed away - but they are in my possession. I'll work on condensing it down for you and re-post a more succinct version shortly with figures.

Sorry, I forgot to mention; despite acknowledging the second "account closing" letter, and the completed loan agreement, the person who dealt with the investigation claimed that the envelope had been opened elsewhere and she had "no record" of the first account closing letter (the one that they had stamped as received and then returned to me without comment, then sent back to them in the same envelope as the second and the loan agreement)

Firstly, delighted to find this forum, it is an invaluable resource. I have a rather long and involved dispute with the Co-Op; I have read the FAQs, but hopefully it will become clear why I feel it necessary to ask for advice outside the FAQ section. In Feb 2004, I went to my bank branch to request a fixed loan of £1000 to clear my overdraft. The rates then advertised for Personal Loans were 6.9%, which seemed fine to me. The adviser at the bank, however, listened to my plans for a business, and suggested a flexiloan, which was then a new product. She told me that the rate would be 9.9%, but I would have up to £7000 available to aid in funding the business. However, after completing the application procedure on the computer, she "discovered" that she did not have a copy of the terms and conditions, nor did she have an agreement for me to sign. She set up the loan, and told me that she would forward the relevant paperwork in the "next few days". When I had waited a week, I called into the branch, but there was still no paperwork; it was suggested that I contact the head office, which I did. For the next ten months, I seemed to be constantly in contact with the office responsible for the loan, but I could not get anyone to believe that I had never signed a loan agreement, or even seen the terms and conditions. Looking back now, I realise it seems naive, but I trusted that everything would be above board... it's a bank, right? They don't make mistakes, this was just an oversight. However, the date on which they took the payment kept changing (moving forward in the month), and they seemed incapable of giving me an accurate date; I was forever transferring money into the account to cover the latest payment, but still being charged because the cash was not there AT THE MOMENT THAT THE PAYMENT WAS TAKEN (being a nightbird, I was checking the account online in the early hours, seeing the payment had been taken early again, and putting the money in within minutes); despite the fact that only the computers knew I had gone overdrawn, I was being charged for unauthorised overdrawings. Eventually, I got most of these charges refunded, but then the bank insisted that they would close my account due to consistent mismanagement. I fought this, and got an admission that it was their fault, since they were incapable of giving an accurate date for the payments. Then they made a payment in error into the current account. I notified them of this when I realised what had happened, and offered an arrangement to repay the sum (it looked like a legitimate repayment and only about six weeks later did I realise it was a duplicate). Rather than come to an agreement, the bank sent me a notification they would recover the money in full one week later. The only way to cover this was to use more of the flexiloan. By November 2004 I was very hacked off. I went to see my local consumer protection people, who pointed out that since I had never signed an agreement, I was not liable for the loan. Legally, maybe, but morally, of course, I felt that I was. I stopped all further payments on the loan and informed the bank that I was refusing to make any further payments until I had a copy of the agreement I had supposedly signed. Of course, they finally had to admit that there was no such form, and posted out agreement and terms. NOW I discovered that I had actually been paying 13.9% all this time! I amended the form to the terms I had originally been quoted, and sent it back with a letter explaining that I expected a reduction in the balance to reflect the interest that SHOULD have been charged according to the adviser's original sales pitch; at the same time, I indicated that I was no longer prepared to give the bank my current acount business, and so would be closing that account. Both form and letter were returned to me a few days later, without comment, but stamped with the bank's "received" stamp and the date. Now I was really mad. I immediately phoned the bank, and told them I would be closing the account immediately all outstanding debits (cheques etc.) had been drawn on the account. I asked for, and was given, a verbal agreement to a £1000 overdraft for one month to allow the outstanding debits to clear, and asked for a final balance to be sent to me to close the account once all the debits had gone through. Two days later, I got a letter informing me that I had gone overdrawn without agreement and was being charged... daily, the same charge would be applied until my account was in credit. I wrote again, drawing their attention to the agreement to an overdraft to facilitate closure of the account. Foolishly, I enclosed the earlier letter (the original) to prove that I had already informed them, and they were aware, of my intention to close the account, plus the signed agreement. I then got a letter stating that the matter was "under investigation", and would be responded to in seven days. Then another. And another. And another. Eventually, five weeks later, I got a reply stating that they had no record of my phone call; the charges would stand. They would, however, reduce the loan interest in future to 9.9%. I then rang the signatory of the letter, and (worn down by this point) accepted a halving of the charges, and the backdated reduction of the loan balance by the amount they had already charged in excess of the 9.9%. They sent out forms for a new loan, and a direct debit mandate, and I returned them. Then nothing happened between March 2005 and September 2005. No follow-up, no mandate activated on my new account elsewhere, no contact. By now, I felt it was no longer my job to chase them, having spent a fortune in time, phone calls and letters already. Then in September, I received another call. Most apologetic that the matter had been "overlooked". After some toing and froing, I got them back to the position we had agreed in March. This still involved £400 of charges, as opposed to the £800 they originally wanted, but I was still feeling like all I wanted was to settle it, even at that ludicrous cost. This time, rather than a loan, it was a simple 3 months of payments then the loan would be set up. I sent 3 post-dated cheques (recorded), checked at the royal mail website that they had been delivered, and waited. And waited. Nothing went through, no contact came from the bank. Until I started getting phone calls 3 weeks ago from the bank's solicitors. I very patiently explained that I disputed the amount (of course, it had gone back to the original 13.9%, plus late payment charges, plus a mountain of charges on the current account). I was told that they would have to refer the matter back to the bank, but either they or the bank would phone me. No phone call, but a letter to the effect that the bank had done all they felt they could, and would now pass the matter to an outside agency. Of course, I'm now preparing a full case to refer to the ombudsman, and awaiting contact from the "outside agency". But my questions for forummers in general are: 1) How will the "outside agency" be able to react when told the sums are in dispute? 2) Should (indeed can) I launch a counterclaim for the value of the charges and excess interest, bearing in mind that I have not actually paid them yet? 3) Does anybody have any idea what else I should be doing? Sorry for going on so long, I will be very appreciative of anyone's advice in this matter.