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BT contract problem

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hi just read all the posts and hope for some help i only found your website today. my daughter had bt phone and broadband for 12 month contract as her husband is in the army they had to move 10 months in to the contract. my daughter thought that she would be on the same contract and as she didnt renew it in april assumed she would be on a rolling contract basiclly get out when she wants and not incur charges. in september bt took an extra £53 on her direct debit which they agreed was there mistake and would refund her but when they took it it also took her over her overdraft so she was forced to pay the charges. she has asked bt to pay it back a number of times but cant seem to get any thing from them. she then decided to move to talk talk. and now she has had 2 letters from debt companies. for the outstanding contract and one companie has added another £70 court charges unless its paid by the 16th of this month. we called bt at the weekend and they said that they automatically put her on another 12 month contract when she moved. i have learned this is what happens when you move. but when she told them she has cancelled her contract becuase bt should have paid her bank charges they said that they cant help she has to go to the bank and sort it with them. the bank says bt should pay her not them. and in the meantime she still has these 2 debt to pay. surely if she cancelled with bt due to them taking money when they should not have then she should not have to pay for ending her contract early. sorry if its long winded

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Hi Mr H, and welcome to CAG.

 

I'd be surprised if your daughter's BB was for 12 months, if they gave her a free router, the PHONE would have a 12 month minimum term, but the BB would have 18 - so it is worth checking.

 

A 'rolling contract' means the minimum term also rolls - so if she also agreed to free weekend and evening calls, she should be extending (rolling) her 12 month commitment each year to keep her locked in, UNLESS she cancelled on the abbiversary without rolling. When she moved, the minimum term of 12 month applies, and would be vecause they transferred her line to the new address at little (or no?) cost. She could not switch to TT until this duration was up, unless she paid BT for the balance of the period she agreed to honour.

 

As for the bank charges, afraid this remains her problem as by giving the DD, she needs to ensure her account is funded to cover this. This is why DD is such a BAD idea. You;re attermpting to justify her transgressions, by citing others as a reason not to pay - but wven looking at it realistically, I cannot see how you could get them to be responsible for this.

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Your daughter is responsible for the bank charges. The bank are correct to point her at BT to try to get compensation and BT are perfectly placed to simply refuse. It is your daughter's "fault" for using direct debit in the first place. When a third party overdraws your account, YOU pay the bank charges. First lesson: don't use direct debit.

 

Since BT do not have to pay back any of the charges and are not liable for this:

 

When she moved, did she move with BT then move to Talk Talk straight after?

 

In which case, she's then also liable for the balance of the 12 months line rental on the restarted BT contract having breached this by moving to Talk Talk.

 

Therefore BT are perfectly reasonable in refusing to pay back the bank charges, since they did not levy them, and are also perfectly entitled to the balance of the 12 months owing.

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thanx fall for replying.. so what your saying is a comapny can take out money they are not entitled to at any time they want and if i occur charges due to their error i am to pay them??

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There's a difference between "cannot" and "should not".

 

If you get a bill, check it, then pay it, the payee CANNOT take more from you than you have, or that you're due to pay, so this does not arise.

 

The payee SHOULD NOT take more than was due, and should get the bills right.

 

In the event that they fail on either count, you've already given them an explicit mandate to take unspecified sums on unspecified dates without the need to give you any notice period.

 

An in that event, you're liable for the bank charges.

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By relinquishing the financial decisions to a third party (BT, in this case) they have no idea what amounts are available for them to draw upon. It could be £1000, or a 1p. This is why giving unfettered access (for variable amounts, on unspecified dates) is such a bad idea. You need to stand over your accounts with a shotgun round the clock to ensure peoplke only take out what they are entitled to. So you have to ask yourself, DD is easy... but for WHOM?

 

Providing BT issued a bill for the amount they were taking,** they have met their obligations - and stopping it is virtually impossible. The trick is not to give them the right in the first place.

 

 

 

**They should give a minimum of 7 days notice (it used to be 10) but even if your salary didn;t arrive in time, that's not BT's fault, and any charges billed for failing to make the payment (another good reason for not having a DD) mean you are always disadvantaged.

 

However, all this has stemmed from agreeing to telephone service and the minimum terms (doesn't matter if you were unaware, it WILL have been mentioned) it remains that the customer needs to manage their affairs in such a way to benefit from the discounts and avoid the penalties - which are there to make it financially expensive for you to leave - a disincentive, if you like. Ignoring it or NOT knowing it, means the benefits you thought you were going to get will not materialise.

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ok now im getting a bit confused. i understand what you are saying that she should have had the funds for the dd so to avoid the charges. she did have the funds for the dd and it was taken without a problem but a couple of days later they then took out an extra £53 which they should not have done. which is why she was left with charges from the bank

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What was the £53 for?

 

If it was for the balance of her commitment of 12 months minimum term, then as she effectively 'left' them, this would be the final amount to settle their last bill. Why do you think they shoudn't have taken it?

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You say they took money they shouldn't have done.

 

To repeat: your daughter agreed they could take unspecified amounts from her account on unspecified dates.

 

It's helpful to have a bill so you can arrange for the funds to be in place, yes, but you don't have to be given adequate or indeed any notice - they can simply debit as they see fit. BT does supply "up to 10 days notice" but that is meaningless. They could post the bill online at 10:07 and debit funds at 10:08 and have still given up to ten days notice, so they're quite within their rights.

 

If that takes you overdrawn, that's your problem.

 

If all this seems madness, you do have to wonder why people ever agreed to pay by direct debit in the first place.

  • Haha 1

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no the money they were taking was for her bill at the time which was 3 monthly payments of £53 july aug and sept which they took then they took another one again in september. so the extra £53 they took was not for the bill or even for bt. where does it say when you take a direct debit with someone they can take the money when they want

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In the case of money being debited incorrectly e.g. the same debit goes through twice, you were not notified (doesn't apply to BT, they don't have to notify you in advance), etc., you can and should get the Bank to reverse the direct debit and put the money back in your account.

 

But you can't do this, because the money never left your account. There were insufficient funds, so you get bank charges. Which are your problem, not BT's. If you do not want to be in a position where one payee's mistake could potentially cost you hundreds of pounds as a string of debits fails following the incorrect one, do not pay by direct debit. You agreed (or your daughter agreed) the payment method and unfortunately this is the consequence.

 

This email thread was one I had with BACS, who confirmed what I'd suspected and that's why I don't use direct debit. In fact following the reply below I closed the door on this by telling the Bank never to allow them on my account: (read from bottom to top, names etc removed for courtesy) as you can see, thanks to the insecurity of the system, you can incur DD bank charges even if you never set up a DD yourself - e.g. it was set up fraudently or by mistake - which I've had twice on bank accounts.

 

--

Thank you for your email

 

The guarentee does not cover any charges that you may incure.This would be a matter between yourself and your bank.If you have anyfurther queries please contact Apacs.the governing body of the Direct Debit Sheme and they should be able to assist you .Their telephone number is 0207 711 6200.

 

Kind regards

 

 

 

Service Desk

 

t: +44 (0)870 1650018 / 0100698 (direct)

f: +44 (0)1582 812227

t: +44 (0)870 165 0019 / 870 010 0699 (switchboard)

 

we believe it is important to reduce any impact on the environment, and ask that if possible you do not print this email

 

 

________________________________________

From: Mark [mailto:]

Sent: 09 November 2007 11:10

To: Service Desk

Subject: RE: DD question

Hi ,

The wording of the guarantee, and the refund, remains vague and ambiguous. Perhaps an example would help:

As we have clarified, my Bank will not require any evidence or documentary proof from a payee that I have authorised them to debit my account.

I have a balance of £100 in my account.

A payee forwards a Direct Debit Mandate request, not authorised by me, to my Bank who action this, and the payee then requests payment of £200 under this false mandate.

My Bank refuse to pay the Direct Debit because I do not have sufficient funds available, and charge me £39 for doing so. No payment has been made to the payee, so there is no payment to the payee to refund here.

The Direct Debit Guarantee requires my Bank to immediately and without question refund the £39 charge, and any consequential charges, because “in the event of an error, your bank or building society must give you a full an immediate refund of the amount paid”

Is the above the correct interpretation of the protection offered by the Direct Debit Guarantee?

Thanks,

Mark

From: On Behalf Of Service Desk

Sent: 09 November 2007 10:38

To: Mark

Subject: RE: DD question

Mark

 

I can clarify that if an error is made your bank or building society must give you a full an immediate refund .

 

When a company signs up to be a Direct Debit originator they are goverened by the rules of the Direct Debit Scheme and if they contiue to disregard these rules their bank would take up the issue with Apacs who govern the Direct Debit Scheme.

 

The customer, as explained previously, is covered by the Direct Debit guarentee.

 

Kind regards

 

Service Desk

 

t: +44 (0)870 1650018 / 0100698 (direct)

f: +44 (0)1582 812227

t: +44 (0)870 165 0019 / 870 010 0699 (switchboard)

 

we believe it is important to reduce any impact on the environment, and ask that if possible you do not print this email

 

________________________________________

From: Mark [mailto:]

Sent: 09 November 2007 10:01

To: Service Desk

Subject: RE: DD question

Hi ,

Thanks for your e-mail. With respect however you have not answered the question I posed:

“what safeguard or mechanism exists to prevent the payee from simply going ahead and using the known sort code and account number to set up the mandate a second time without my authorisation”

If no safeguard does exist (the document you sent, and the basis of the DD guarantee describes a remedy for failure, not a safeguard against it):

In the event that the payee does go ahead and set up a DD without my authorisation, and attempts to take funds which are not available, it would at first glance appear that it is the Bank customer who is then liable to pay the Bank’s charges for the failed DD even though the customer is not the one at fault thanks to the lack of safeguards which permitted the error or fraud to occur.

Can you clarify:

“If an error is made by the company or your bank or building society, you are guaranteed a

full and immediate refund from your branch of the amount paid.”

Does this full and immediate refund also oblige and force the Bank to refund their charges to me, or do I need to pay for the payee’s error or fraud – I do not see this clarified in the DD guarantee?

Thanks,

Mark

From: On Behalf Of Service Desk

Sent: 09 November 2007 09:48

To: Mark

Subject: RE: DD question

Thank you for your email

 

You are covered by the Direct Debit guarentee which states if any money is taken in error then you are entitled to a full and immediate refund.Please find attached a copy of the Rights and Safeguards to the Direct Scheme

 

Kind regards

 

Service Desk

 

t: +44 (0)870 1650018 / 0100698 (direct)

f: +44 (0)1582 812227

t: +44 (0)870 165 0019 / 870 010 0699 (switchboard)

 

we believe it is important to reduce any impact on the environment, and ask that if possible you do not print this email

 

________________________________________

From: Mark [mailto:]

Sent: 09 November 2007 00:56

To: Service Desk; Bacsservices Webmaster

Subject: DD question

Hi,

I was wondering if you could answer a question I have regarding Direct Debits:

A Direct Debit instruction can be set up over the telephone, in which case, no physical documentation exists that I authorised the instruction, I believe it used to be the case that a signature was required by way of completion of a physical paper form.

In the case of “paperless direct debits”, my Bank simply go ahead on the payee’s say-so and set up the mandate, assuming it to be genuine and authorised.

I then, at some later stage, cancel the Direct Debit mandate by notifying my Bank and the mandate is cancelled. The payee cannot collect further monies under that mandate, as per your FAQ:

Q. Can money be collected from my account after I have cancelled a Direct Debit Instruction?

A. No. The organisation would have to get your authority to reinstate a cancelled Instruction.

My question is: given that the payee does not require any formal authorisation (e.g. a signature) from me to set up the mandate in the first place, what safeguard or mechanism exists to prevent the payee from simply going ahead and using the known sort code and account number to set up the mandate a second time without my authorisation, and then debiting funds in a manner directly contradictory to your FAQ answer above; what part of the system prevents this from occurring?

Thanks,

Mark

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I still cannot see where BT have taken any amount that is 'wrong' - they did not double charge anf they bill quarterly (3 x monthly amouny)..

 

As for where does it say 'when can they take the money they want' - LOOK at the DD form, it clearly states payments are taken in 'unspecified amounts on unspecified dates', which is short for 'any amount / any date'. When VARIABLEeach month DD's started, there was a box that you completed giving the date and amount the payments were to be taken each month, but it didn;t take long to realise the system could let the merchant decide the amount each month, then WHEN each month - and the transformation was complete. A VARIABLE DD is now the ONLY way of processing one, AND no signature of the account holder is provided to the bank (a copy of the mandate). The bank takes this on trust.

 

Dreadful, isn't it?

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I still cannot see where BT have taken any amount that is 'wrong' - they did not double charge anf they bill quarterly (3 x monthly amouny)..

 

she had already paid her bill in full but they then took an extra £53 in september when it should have not took it until october. bt did agree that they were in the wrong. the bank honoured the money even though she did not have it in there so it got paid and she was charged for not having suffiecnet funds in her bank. bt gave her back the £53 but have said that even though the error was thier fault they wont pay her charges.so she did not have to have money in there for a bill that was not due for another 4 weeks.

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Wlecom to the unfair workd of Direct Debit. If they won't pay for conseqential loss, you're stuffed. DD is NOT for people who have their finances at the wire as it often breaks down and costs more.

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