[OT] Rant - Direct Debits

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

Apparently.
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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!).
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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.
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AnthonyL

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On 02/08/2017 12:38, AnthonyL wrote:

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.
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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.
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Roger Hayter

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Not ideal for those into budgeting.
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On 8/2/2017 12:11 PM, NY wrote:

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.
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On 02/08/17 16:15, newshound wrote:

Interesting - I have not noticed anyone paying me interest - must check!
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Its more likely the power company's software does it that way and they can't be bothered to change it.
IMO they waste more staff time by going the fixed amount route and having to fart around changing the amount they deduct when the customer wants to do that or refund overpayments, than they would if they just charge for what you spent.
Another consideration is that some might prefer to know what they will be charged but IMO you should be able to specify which you prefer as the customer.
Some of ours do it one way and some do it the other.
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On 02/08/2017 11:51, Tim Watts wrote:

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 ......
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Robin
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On 02/08/2017 12:20, Robin wrote:

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

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It's not a dd. http://www.moneysavingexpert.com/banking/recurring-payments
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On 02/08/2017 21:19, bert wrote:

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

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On 02/08/2017 22:45, Max Demian wrote:

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.
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Robin
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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.
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bert

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On 03/08/2017 14:39, bert wrote:

AFAICS you are the only one who is confusing direct debit mandates with continuous payment authorities. I am fairly sure that a direct debit is now, and has always been, authority for someone to take money from a bank or building society account only. And I am very sure that my CC bills are paid every month by direct debits.
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Robin
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Which bit of CC account do you no understand?
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bert

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On 03/08/2017 19:32, bert wrote:

I am sorry if I have misunderstood something but I really don't understand the question. I had thought all I was doing was agreeing with Max Demian. That is, to spell it out, that I have given my credit card providers direct debit mandates and instructions to take the total balances outstanding on my credit card accounts from the bank accounts in the mandates on or before the due dates, which they have invariably done (for more years than I care to remember).
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That's not a DD against your credit card that's a DD on your bank account albeit raised by a cc company.
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bert

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