Charges as result of change to DD date

[thecornflake]

My Direct Debit for Swiftcover normally comes out on the first of every month. This month (January) I received an email from them on the 7th to say they'd had problems with their direct debits at the beginning of the month and hadn't taken it and that they would be re-attempting it on the 12th.

 

Being a 6 week month for me, plus Xmas etc my account was slightly over the overdraft limit at this point - but I'd assumed at least all my bills had been paid.

 

Of course the Direct Debit has now failed, incurring bank charges. They've also said they're going to keep trying every couple of days.

 

I'm writing an email back to them to say there will not be enough funds until the 27th and I'll cancel the direct debit if they're going to keep trying to avoid further charges.

 

Can I claim the bank charges I've already incurred from Swiftcover seeing as they've effectively committed breach of contract by taking the money out on the wrong day?

 

I can't find any decent information on the Direct Debit laws to confirm this but I assume the DD agreement constitutes an agreement that the payment is taken on a certain date.

[BankFodder]

As they hadn't told you in advance, you probably have a good basis for recaliming the charges. Of course they will argue that you shojld have better accounting and you should realise how much is in your account.

 

However, if you are really prepared to go right ahead including suing, you are likley to win.

 

As usual, you need to get tough, set dealnes and stick to them.

 

this means that you write to them, give them 14 days to refund you the money or esle you sue. At the end of the 14 days, you do exactly that.

If you are not prepared to carry out your threat then don't bother.

Of course you could aslo claim the money from your bank whose chages will have been excessive. However, this is likley to be very long-winded because of the general stay on charges claims

[thecornflake]

Thanks for your reply. I am aware of the situation regarding bank charges have been a member here for quite a while now), I luckily reclaimed most charges before the test case started.

 

As I assumed all the bills had gone out when they were supposed to I think I have a good argument there, especially as they didn't notify me until the 7th and Direct Debits when due to go out on a non-working day are requested on the first previous working day which would have been the 31st December.

 

I'm trying to figure out if a Direct Debit agreement is a legally binding contract. If it is then I think I'm fine as the date of the payment is included in the agreement. Therefore it's a clear breach of contract and I can claim any costs incurred due to it.

 

I'm prepared to go through with the process - they're still sorting out a simple claim for me after 6 months when someone drove into my parked car. Not my favourite company at the moment.

[thecornflake]

I was thinking about this some more. My argument hinges on the date of payment being part of the 'contract'. Companies have to give 10 working days notice to change the date on an agreement, but I'm not sure how this works in a one-off case where they re-apply for the same payment.

 

If this is a breach of contract surely every time a company re-applies for a failed direct debit on a date other than the agreed one this would also be a breach of contract. Which obviously is quite a big thing if it is as they do this all the time.

 

EDIT: Additional info from the BACS website (source: Direct Debit help centre - incorrect payments) -

 

If a Direct Debit payment has been taken which is not in accordance with the advance notice received i.e. too much has been taken or the payment has been taken on the wrong date (the organistion must take the Direct Debit payment on or within three working days after the specified date as advised in the Advance Notice), you are entitled to an immediate refund of the amount debited from your bank under the Direct Debit Guarantee. Contact your bank in person at the branch, by phone or write to them

Edited January 15, 2009 by thecornflake

[BankFodder]

The direct debit is not necessarily a binding agreement on its own. On the other hand it will be part of some larger agreement. If it says that the collection date is the 1st and if there has been a pattern of collection happening on that day then you will have no problem in saying that that collection date is incorporated into the contract

[BankFodder]

By the way, you should also check your credit file. You could easily find that they have logged the payment failure their too.

[thecornflake]

From what I understand there is a DD agreement with the bank to allow the payment to be taken on the set date. I know that if an error is made they have to refund it which backs up the argument that it definitely is a proper agreement.

 

There doesn't seem to be much information available on the legal side of DDs so I've emailed the Financial Ombudsman to find out what they think.

 

As companies regularly re-present DD payments when they fail there is potentially quite a large implication if I'm right - all re-presented direct debits would be covered and you would be able to claim for any charges resulting from these additional requests.

[thecornflake]

Update - Nothing yet received from the FO so I'm going to call them today. I need to know who is liable for the charges - Everything on the BACs site points to the bank being responsible.

 

REALLY need to know the legal status regarding DD agreements - I've been Googling but can't find anything useful.

 

Swiftcover have now re-presented the DD twice more, so it's up to £90 in charges, plus overdraft interest. Maximum notice they've given me is 5 working days.

 

I'm going to try and claim the money from them anyway and see what happens, as they've admitted it was their fault anyway that the DD date changed.

[thecornflake]

New Update -

 

The bank refunded the charges in the end as they decided it was an error that the first payment for the month was on the wrong date. Well pleased that the bank actually decided to be sensible in this case.

 

Swiftcover sent me a copy of the Direct Debit Agreement, stating it as evidence that the notice period is only three working days. It is three working days because they have tippexed out the original number and written 3 over the top.

 

 

Have forwarded this on to the OFT for investigation - they are very concerned that Swiftcover have deliberately changed a standard Direct Debit agreement.

 

Also they complained because I sent them an email late at night and as the person has a Blackberry it woke them up.

 

Must....not....instigate....evil....plan......

[IdaInFife]

The Direct Debit Guarantee

• If the amounts to be paid or the payment dates change, the organisation collecting the payment will notify you normally 10 working days in advance of your account being debited or as otherwise agreed
  
• If an error is made by the organisation or your bank or building society, you are guaranteed a full and immediate refund from your branch of the amount paid
  
• You can cancel a Direct Debit at any time by contacting your bank or building society. We also recommend you notify the organisation concerned
  

from bacs itself.

 

Direct Debit - your rights

 

Ida x