UK: Supreme Court Rules Bank Charges Are Legal.

How could a bank justify trying to shove through the same DD repeatedly in one day, causing an OD? I've had one or two cases where a company tried to do a DD, it didn't come through, and that company contacted me straightaway to say there had been a problem. I could then work with them and my bank to sort it out. BT or anyone else doesn't just cut you off if a DD doesn't come through, they contact you first, but they sure as hell won't pay your OD fees if the DD does come through and the funds aren't there.

The problem isn't just DDs though. If you use your debit card at a shop and there is a technical glitch where you get double charged, or you write a cheque to someone who doesn't use it until much later than you expect, you might get caught out, and though you might be able to fix a glitch once it's caught, the bank is not under any obligation to refund the OD fees incurred.

THe DD's are automated. Perhaps they need to tighten up that area. But the person requesting the DD should contact you but again, what if their system is automated?

No BT doesn't cut you off straight away but what if it were the 'end of the line'? They might.

If there was aglitch and you were charged twice, then you have a justifiable case. If you wrote a cheque that hasn't been cashed yet, your books should 'list' it as a liabilty and your real balance adjusted. If they then cash it and you go overdrawn, I'd say that is your mistake, no one elses.
 

This whole business of direct debits or standing orders scares me. I don't use them here (in the States) because I don't like the idea of not controlling when I pay the bill, especially since my payday isn't fixed. It seems that DD and SO are much more common over there, though, and in some cases required. My bf's rent is DD every week or month (whatever it is). It seems that the system is set up to force people to use DD even if they don't want to. This is all based on observation of what I've seen there and what I have read here.

And TarnLover- what bank didn't refund $4000 that was stolen out of your account? If you had your identity stolen or credit/debit/ATM card stolen I'm pretty sure all banks will refund the money. I've never heard of that being denied (since most are associated with Visa or Mastercard and they have those types of protections/insurance for customers).

The bank doesn't decide. You do by setting up DDs and SOs. The bank doesn't pay if you don't have a DD.

Many organisations require you to pay by DD or SOs.  For example, I have to pay rent by standing  order. If, hypothetically, an emergency occurred where I would be a day late with my rent, I would like to be able to talk to my letting agency about it.

This whole business of direct debits or standing orders scares me. I don't use them here (in the States) because I don't like the idea of not controlling when I pay the bill, especially since my payday isn't fixed. It seems that DD and SO are much more common over there, though, and in some cases required. My bf's rent is DD every week or month (whatever it is). It seems that the system is set up to force people to use DD even if they don't want to. This is all based on observation of what I've seen there and what I have read here.

Don't be scared of DDs & SOs. They really are very useful. Specially if you have a habit of forgetting to pay bills. You can control the DD and SO and arrange for them to come out of the account say a week after you pay. They are very common and very easy to use, specially with n line banking. A lot of places ask for things to be DD but am not sure of being forced. The CC companies always send me a form when I forget to pay. They even call and suggest I set one up. I don't know why I don't do it. I just don't. But I have DD for all my insurances and mortgage (that might be a requirement of the lender?). The rest (gas, electric, phone etc) I like to pay. Too easy to not keep track of the outgoings. Some companies even give discounts if you pay by DD. It does make sense for some things and certainly can give peace of mind. Like knowing my car insurance hasn't lapsed because I forgot.

But don't fear them. Fear the unauthorised OD. But see this is where you would need to set up an appropriate level of authorised OD to offset the erratic wage payments.

Slightly OT - but credit card companies here in the UK have a direct debit system where they only DD the minimum payment. Another way of encouraging people to go into debt.

You can control the DD and SO and arrange for them to come out of the account say a week after you pay.

But Gottogotolondon just said that she doesn't have a fixed paydate, so she has no way of guaranteeing that her DDs and SOs would come out of the account before her pay went into the account.  She could arrange to have her DDs taken out on a particular day, say the 5th of the month, but what if her pay went in anytime betweent the 1st and the 7th?

In our case, DH and I are self-employed so we don't get paid on a regular basis. Fortunately, we have savings to cover our debits, but many people earn just enough to pay their bills - they can't pay them till they get paid.

Slightly OT - but credit card companies here in the UK have a direct debit system where they only DD the minimum payment. Another way of encouraging people to go into debt.

You should be able to set it up to pay the statement balance by DD, not just the minimum payment.

This whole business of direct debits or standing orders scares me. I don't use them here (in the States) because I don't like the idea of not controlling when I pay the bill, especially since my payday isn't fixed. It seems that DD and SO are much more common over there, though, and in some cases required. My bf's rent is DD every week or month (whatever it is). It seems that the system is set up to force people to use DD even if they don't want to. This is all based on observation of what I've seen there and what I have read here.

The banks don't force people to pay with Direct Debit, the company who you are paying determines whether or not you can pay by means other than Direct Debits.  The company are obliged to confirm in writing to you the exact date that the instalment will come out and the amount.  They must do this a minimum of 10 working days before the first instalment is due.

Failed Direct Debits are represented by the Company you have the DD set up with, the bank is only doing what they have been told to do.

DDs can't be represented on an hourly basis.  It takes a minimum of 3 working days to set up the represented payment (again by the company, not the bank).  If a DD has been represented more than once in a business day then that's a fault of the bank and they should be forced to repay any charges incurred.

Standing Orders are entirely in your control.

In both cases, if you know that the funds aren't available you can stop the payment going out (and avoid any charges) by contacting the bank (any branch) as late as 5pm the day before it's due out to get it stopped.

In saying that...if a DD of mine bounces then I would want the bank to pay the instalment on my behalf to avoid any sanctions that the company may impose ( ie BT cutting you off)...but I don't want to pay £30+ for the pleasure.

I didn't mean the banks force the DD/SO but that the companies do. Just like many companies won't pay you with a real check- only direct deposit (meaning you HAVE to have a bank account). I know that here, bills like cable, electricity or phone will do DD for your account, but on the due date of the bill only so you have no control over the withdrawal date. Also, with bills that fluctuate based on usage I definitely do not want direct debit. I will say my car payment and car insurance are both on DD but only because these are too important to ever "forget" (which I don't forget bills! Who can do that??)

But Gottogotolondon just said that she doesn't have a fixed paydate, so she has no way of guaranteeing that her DDs and SOs would come out of the account before her pay went into the account.  She could arrange to have her DDs taken out on a particular day, say the 5th of the month, but what if her pay went in anytime betweent the 1st and the 7th?

But see this is where you would need to set up an appropriate level of authorised OD to offset the erratic wage payments.

Also, with bills that fluctuate based on usage I definitely do not want direct debit. I will say my car payment and car insurance are both on DD but only because these are too important to ever "forget"

Ditto

(which I don't forget bills! Who can do that??)

Me    that's why I should set up DDs but I don't. 

And TarnLover- what bank didn't refund $4000 that was stolen out of your account? If you had your identity stolen or credit/debit/ATM card stolen I'm pretty sure all banks will refund the money. I've never heard of that being denied (since most are associated with Visa or Mastercard and they have those types of protections/insurance for customers).

Wachovia.  Yes they are protected if your card is stolen (and you report it), but identity theft is a totally different thing (for starters, you have to prove your identity has been stolen...which is virtually impossible).  Wachovia has actually changed their policy since then (perhaps because of lawsuits against them for situations like mine?) but I would still never use them again.  You just need to be very careful about what your bank's policy is...because a lot of time you really are completely helpless...even if it's not your fault.  That's why we have to be prepared for everything and make sure we are making the best choices long before we find ourselves in a bad situation.

You should be able to set it up to pay the statement balance by DD, not just the minimum payment.

But they are much more blatant about setting up a payment for the minimum balance only.

But see this is where you would need to set up an appropriate level of authorised OD to offset the erratic wage payments.

But the bank decides how much of an authorised OD they will give you, or if they will give you one at all.

My authorised overdraft alone won't cover my monthly expenses.

But they are much more blatant about setting up a payment for the minimum balance only.

That is true but it does keep one out of reach of their penalties. One can always top up or as Geeta suggested set up to pay the balance.

But the bank decides how much of an authorised OD they will give you, or if they will give you one at all.

My authorised overdraft alone won't cover my monthly expenses.

One must negotiate with them. Usually they just offer the box standard £100 and people leave it at that. I have never heard of them not offering one to people in employment. Even my wife was given a £100 OD when she first opened an account without a job and a separate bank to me.

But the OD is not for routine use. It is there as an emergency, for the one-offs.

DH was once charged £180 for a £5 overdraft, due to a cheque that he paid someone else clearing before he expected it to. This was a business account, with no authorised overdraft.  He had money in an additional personal account at the same bank, as well as with another bank - but because nobody notified him that he had been overdrawn, he never transferred any money  over. He didn't become aware of the charge until several days later, which is why it grew so high.

After complaining about it, he was given £20 back.

This is the sort of thing that I think is the problem.  While I agree that Sweetpeach's husband was liable for the unauthorized overdraft on his account and should've had to pay a fee, £180 for a £5 unauthorized overdraft is exorbitant and unfair.

Those of you who say that Sweetpeach's husband agreed to the bank's terms, and thus the bank can charge whatever fee it likes - even to the point of applying multiple fee charges to multiple attempts to clear one check - should be ashamed of yourselves.  Charging a fee once for one unauthorized overdraft is fair; charging multiple fees for the same incident is fraudulent.

Those of you who say that Sweetpeach's husband agreed to the bank's terms, and thus the bank can charge whatever fee it likes - even to the point of applying multiple fee charges to multiple attempts to clear one check - should be ashamed of yourselves.  Charging a fee once for one unauthorized overdraft is fair; charging multiple fees for the same incident is fraudulent.

If you read your bank's policies, most of them do say that the bank can try to run the charge through multiple times.  This happened to a friend of mine a few years ago when her car payment was direct debited and she didn't have the funds to cover it.  Her bank's policy was to charge a $75 insufficient funds fee...and they were authorized (per the terms and agreements) to try to run the charge up to 7 times in a 7 day period (which they proved by sending her a copy of the terms and agreements she signed).  They did.  She had to pay $525 in insufficient funds fees.  And to top it all off, they denied the charge every time...so that charge was in addition to the car payment she still had to make.  You HAVE to read ALL the small print. 

Do I agree that the fees at most banks are ridiculous?  Yes.  Want to make a difference?  Don't bank there.

So which High St banks don't have these crazy fees?