Time for Direct Debits

barman linen

Can anyone shed light on the law and / or the practice for drawing the cash by direct debits. For example a direct debit due to hit on a Monday hits the account electronically at midnight but the banks dont open until 10am - or I sweep funds into the account electronically by 8am.

Would an unpaid debit fee be charged ?

My bank says that 'banking law' requires you to have funds in the account 'at the time the debit arrives ' - yet the payment date is up to close of business on the day concerned.

Surely many people make cash lodgements on the day to meet payments ?

I am interested to hear what is the 'law' moreso than practice......

Is this the new way to recapitalise the banks ?

marywary

I thought dd's only hit accounts at 7 in the morning & if someone made a lodgement to their a/c on the same day it was fine because they're not overdrawn? If you're passing dd's on to someone's a/c that doesn't have funds to meet then surely you don't incur the charge, would have thought the person you're debiting would have to pay it if they don't have the money to meet? I know that if you have a dd presented on your a/c today & you don't pay in till tomorrow then tough luck, the dd bounces & the payer is charged a fee which is fair enough. All your customers should know the date that you will be making dd claim for payment to make sure they have money to pay it.

Kennie1

The day starts at 12am, if you dont have money in the account when the DD hits the system your A/C is out of order... simple as...so you get charged for it, you may not like it but the charge is perfect legitimate.

Say I go into the bank with a cheque drawn from your account at 10am and there is no money in your account to clear it, how is the bank (or me for that matter) supposed to know that you intend to come in later in the day to lodge money in to your account... same principle!

barman linen

Kennie1 wrote: »

The day starts at 12am, if you dont have money in the account when the DD hits the system your A/C is out of order... simple as...so you get charged for it, you may not like it but the charge is perfect legitimate.

Say I go into the bank with a cheque drawn from your account at 10am and there is no money in your account to clear it, how is the bank (or me for that matter) supposed to know that you intend to come in later in the day to lodge money in to your account... same principle!

Would the bank charge me for not having funds when you walked in the door..?....I think not.

You would just come back when the money is there or call me to make arrangements to pay you the funds.

Now expand the example.....say you walked in with three cheques and I had funds to meet two....wouldn't the bank cash the two and let you walk away with the other one...? What do they do if they hit your account with a series of debits and there is funds for two and not for a third?

Kennie1

Yes they would charge you for writing a cheque when you had no funds or not enough funds to fully cover the cheque in the account, and further more I would call you if it bounced and the conversation with you would be pretty blue as wel (got caugh too may times to have a polite conversation)

I am not here to argue the point, I am just saying it like it is. I dont have an interest here, as like many others I have gotten caught a couple of times myself and fully understand the fustrations of getting charged for all the DD's when there may be funds for 2 but not for the third. But to be reasonable, I now know that i will be charged for all DD's and i now know not to make that mistake again! As I said before we may not like it but that is the rules, if we dont like the rules there is no one putting a gun to our heads and saying that we have to use that bank or any bank for that matter

homer911

Kennie1 wrote: »

The day starts at 12am

Technically there is no such thing as 12am. 12 is neither am nor pm! Its either mid-day or mid-night

I've seen so many people get confused by this!

To answer the question, I'm with NIB, and if you register for their email/txt service, you can be notified of any transaction on your account in the morning of any pending transaction which would otherwise push you over your limit and they would therefore reject it. You then have until COB to lodge sufficient cash funds (or transfer from another NIB account) to cover the difference

Kennie1

Didn't realise i was being obtuse? am = before mid day. pm = after mid day. Guess you told me:P

nlgbbbblth

The clearing system updates five nights a week

Monday, Tuesday, Wednesday, Thursday and Friday.

Nothing happens on a Saturday or Sunday night.

A direct debit due on Monday is on its way out of your account after the Friday night update (i.e. early Saturday morning).

By the same token, credits / lodgments due in your account on Monday can be drawn from the ATM after the Friday night update (i.e. early Saturday morning).

Banks prefer customers to pre-fund cheques and debits i.e. have the money in the account on the day before presentation.

It is too difficult to monitor / chase after people who lodge "on the day".

http://www.youtube.com/watch?v=S2DJJ2TKvYM

Rebel1977

Direct debit leaves your account at about 7.00 in the morning, same with most electronic payments such as standing orders. If you dont have enough money in your account in the morning you have up until about 4.00 to lodge to your account to ensure the direct debit is paid, otherwise it will go unpaid and you could incur a unpaid direct debit fee.