[OT] Rant - Direct Debits

[Tim Watts]

The DD was invented to pay variable sum bills.

So *why* do few energy suppliers offer DD on the amount due?

They all like to have DD for some fixed monthly guesstimate sum.

I've just had another supplier (non utility but requiring regular payments) moan I underpaid them (with a standing order as the amount went up and I didn't notice).

I asked why didn't they offer DD as it was made for the task.

Reply: Well you can use Standing Order (did, that was the problem) or pay by BACS (no thanks, it's another thing to remember).

Is this the age of stupid or something - did the whole of the 80s pass them by when DDs were popularised?

[Huge]

So they can overcharge you (and zillions of other people) and invest the money on the overnight markets in London.

Apparently.

[NY]

For some reason, energy companies like to be paid the same amount each month (so you end up overpaying in summer when you use less energy and hope this cancels out the underpayment in winter). They can't handle the concept of drawing a different amount each quarter (or whatever billing period you choose). It took me a long time to get NPower to do this.

I wonder if banks charge a company more money to use DD for a variable sum than for the same sum every time (aka a standing order!).

[Robin]

Speculation (but drawing on a career which involved from time to time consideration of the inability of much of the great British public to manage their money): because the suppliers find an awful lot of people are incapable of budgeting for the fluctuations in monthly charges so in the winter either

(a) the DD's not paid - leading to more admin costs, cumulative debts, even more admin costs, pressure to be nice to the poor people who cannot pay etc

(b) the DD's paid only by people going overdrawn which triggers fees and pisses people off, makes them complain, which means more admin costs and ......

[AnthonyL]

My experience varies. A couple I've used were quite happy to DD from my supplied reading if I gave one. My current gas is fixed per month and as I start in June I overpay significantly until winter arrives.

My current electricity supplier offers DD (or take it from a Credit card) or prepay any amount by bank or credit card based on the reading I submit or their best estimate which they inform you of beforehand.

Since I get a % back on all Credit Card expenditure that is ticked as my default payment option. Not sure what there isn't to like.

[alan_m]

You can cancel a DD from a bank yourself

The equivalent DD service by way of a Credit Card hasn't got the same protections and has to be cancelled by the recipient. There is a history of some large companies in the past failing to cancel a CC debits in a timely manner.

[newshound]

OVO have just upped their interest rate on credit balance from 3% to 5%. I tend to be fairly relaxed about running in credit, but now even more so.

[Max Demian]

Doesn't stop credit card companies taking the whole, variable balance by DD each month.

[Tim Watts]

Interesting - I have not noticed anyone paying me interest - must check!

[bert]

It's not a dd.

[Max Demian]

My credit card accounts certainly are paid in full by DD every month from my bank current account.

[Robin]

Mine too. But people who can manage that are rarely if ever people who are incapable of budgeting for the fluctuations in monthly charges for energy. And the CC companies gain: they charge interest if the DD is not met; and may also get out of a balance transfer deal.

[Roger Hayter]

That's history, fortunately. The law was changed to prevent this and the credit companies have all fallen into line over the last few years. So now the cardholder *can* cancel payments, even if the recipient doesn't want them to.

[Brian Gaff]

Well EDF seem to manage them, as do Virginmedia, so if others have issues then I'd give them the old boot and change to an organisation who can actually be bothered to calculate bills. Brian

[Andy Burns]

Do they take a variable amount each month, for the actual usage that month? Or a fixed amount each month for a twelfth of the estimated annual usage?

[fred]

My old electricity supplier stopped taking DDs from my credit card as a par siminous measure.. I preferred this as it eliminated the possibility of bei ng overdrawn on my current account and left me only one bill to pay at the end of the month. I got so pissed off I just didm't pay the bill till they phoned me and then paid by a credit card . For the few pence it saved them in credit card fees it cost them a lot more in admin.

I switched suppliers. Now I submit a reading when asked and when I get the bill put it into my ( Google) calender with an automatic reminder to loag o n and pay it. Do the same with my credit card bill.

[Chris B]

Careful, I think you are mixing up two issues.

1) A credit card billing you a variable balance every time month/quarter/year etc - you are right its not a DD.

2) The credit card extracting from your bank the exact (variable) amount to clear your card balance every month. - this is a DD.

[bert]

That's not a DD against your credit card that's a DD on your bank account albeit raised by a cc company.

[bert]

Again that is not the same as a DD against your cc account. The advantages of DD to any company are lower bank charges and accuracy of amount collected.

[bert]

1 Any company taking money from your bank account under their control variable or otherwise is operating the DD system

1. Any company taking money from your CC account is NOT operating under the DD system but is using the authorised recurring payments system.