Direct Debits Coming Out Early (UK)

Discussion in 'Community Discussion' started by kolax, May 21, 2011.

  1. kolax macrumors G3

    Mar 20, 2007
    What is with some Direct Debits coming out my account a 2-5 days early? Today, I just went overdrawn, because a direct debit came out - which was my Orange bill. Orange said they will direct debit my account "on or after 23rd of May". Well, I awoke this morning to find I had been overdrawn because a direct debit came out on the 21st of May instead of the 23rd of May.

    What is puzzling me is that on my online bank statement, it shows up as the "23rd May - £xx.xx", even though the freaking money came out my account on the 21st May taking me overdrawn.

    What is going on? Is this normal? Why is a direct debit coming out early? The fact that it says 23rd of May on my online bank statement makes me think it is my bank that accepted it early, rather than Orange sending the request 2 days early.

    I've noticed direct debits occur 5 days early too - the bloody Royal Wedding really screwed me over, since the Friday was an official holiday and the Monday was a bank holiday, even though my direct debit was meant to come out on the Tuesday, it came out the Thursday before! What the hell..?!

    Can someone explain all this and why it is normal? I don't understand why bank holidays affect digital transactions, unless they give their freaking computers the day off.
  2. iJohnHenry macrumors P6


    Mar 22, 2008
    On tenterhooks
    Playing with the "float" has become a World-wide pass-time, with banking institutions.

    There is big money in the withdrawal/deposit timing of financial transactions.

    And, as usual, the consumer loses.
  3. CalBoy macrumors 604


    May 21, 2007
    Why not pay your utilities via credit card?

    The only ones that I can't pay using a credit card are electric and water. Otherwise everything else (including ATT) gets put on a card that gives me fewer things to watch with my checking account.
  4. neiltc13 macrumors 68040


    May 27, 2006
    The Direct Debit guarantee offers the following benefits over paying via credit or debit card:

  5. kolax thread starter macrumors G3

    Mar 20, 2007
    Even if I had a credit card, I'd assume it would work the same way (i.e. a direct debit)?

    I have no problem with direct debits - they are actually quite favourable to the consumer, as long as they come out on the date they say they will, not 5 days early on occasion!
  6. CalBoy macrumors 604


    May 21, 2007
    Credit cards already offer most of those protections, at least substantially so.

    Plus credit cards offer the additional advantages of cash back and a streamlined payment system (funneling all of your utilities through a single source rather than have a scattered series of payments throughout the month).

    I'm sure they would be directly charged to your credit card, but the huge benefit to you (and your situation in particular) is that even if the company charges early by 5 days, you will have at least 20 more days before the actual payment to the credit card company needs to be tendered. You will have ample time to allow paychecks to be deposited or to transfer money into the appropriate account. It's essentially a shield against over drafts and makes bank holidays irrelevant to when you need to worry about paying utility bills.
  7. neiltc13, May 21, 2011
    Last edited: May 21, 2011

    neiltc13 macrumors 68040


    May 27, 2006
    Many companies will charge extra if you don't pay by Direct Debit.

    Many of the benefits of credit cards don't kick in until you spend £100 as well. For example, when you spend over £100 on a credit card, your can then reclaim any losses from the credit card company rather than the retailer if something goes wrong.

    BT for example charges £1.80 per month to customers who do not pay by direct debit.

    Direct Debit isn't simply telling the company you want to pay your account number and bank, it creates a constant link between your account and the company you are paying. More info here:
  8. andalusia macrumors 68030


    Apr 10, 2009
    Manchester, UK
    Sometimes my statements show the transaction without the money actually having left. So it's like a ghost transaction until the date it's actually completed. Perhaps yours is like that?
  9. bruinsrme macrumors 603


    Oct 26, 2008
    Pay bills on a credit cards and let the points build up.
  10. CalBoy macrumors 604


    May 21, 2007
    Oh that's unfortunate. Direct deposit and bill pay have typically been trumpeted here but companies don't charge more for credit card transactions for the most part these days.
    Yeah that's like ebill pay here. I've never been forced to do it or pay an extra charge if I didn't use it or if I used a cc instead.

    Although if one's phone bill is high enough the cash back could easily defray the penalty fee.
  11. borisiii macrumors 6502

    Jul 4, 2010
    A clause of the direct debit guarantee which may be of interest:

    If an error is made in the payment of your Direct Debit, by the organisation or your bank or building society, you are entitled to a full and immediate refund of the amount paid from your bank or building society.

    Since a direct debit is managed by your bank, not the company receiving the payment, it is your bank that you need to deal with. You authorised your bank to make a payment to Orange on the 23rd. They made a mistake in taking the money from your account before the agreed time. The direct debit agreement entitles you to a refund when a mistake is made, and a reimbursement of any consequential losses (e.g. overdraft fees). Contact your bank explaining the situation and what you expect them to do. They are bound by the agreement to help you, so they should be cooperative. If the person you deal with isn't helpful, threatening to take your problem to the financial ombudsman will invariably lead to a speedy resolution. HTH.
  12. rdowns macrumors Penryn


    Jul 11, 2003
    While I do all my banking online, no company gets access to my checking account. I pay as many bills as I can with credit card (points or cash back) and the rest through my bank online.
  13. callmemike20 macrumors 6502a


    Aug 21, 2007
    In America, many companies charge "convenience fees" for paying a bill online or through direct debit. It is counterintuitive.

    For example, Ticketmaster charges $2.50 to print your ticket online instead of having it sent to you.

    My electric company (I believe that's who it was) charged me $2.00 to pay online with a debit card.
  14. kolax thread starter macrumors G3

    Mar 20, 2007
    I'd cancel the direct debit and pay monthly by card, but they whack a £3.80 charge on for not paying by direct debit..

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