Watch those Direct Debits in New Zealand.

November 20, 2009 by Avalon
Filed under: Avalon's Money Thread, Banks 

I need to cancel a Direct Debit. No problem you would think? Hmmm, not so fast – this is the New Zealand Banking system, and so of course it just ain’t that simple.

In Avalon’s Guide, one of things I stress is:

And something which is vitally important: once you have closed down all your utilities in the UK, like gas, electricity, internet, and you have told them not to take any more money from you via Direct Debits – also tell your bank! You should always cancel your Direct Debits with the bank, and then if any company “forgets” that they shouldn’t be charging you anymore, they can’t get your money.

So I figured (I think rather sensibly) that I would do the same thing here. Cancel the Direct Debit at the bank just in case the company I’m dealing with (which so far has shown itself to be run by a bunch of bone idle morons) “forget” and try and take another premium.

But the bank wont do it.

Apparently, the only way to cancel the DD at the bank is to cancel my Credit Card and get a new one.

What???? Mad

Are these people for real?

This is despite a clause on the DD form that says:

2. The Customer may:
(a) At any time, terminate this Authority as to future payments
by giving written notice of termination to the Bank and to
the Initiator.
(b) Stop payment of any Direct Debit to be initiated under this
Authority by the Initiator by giving written notice to the
Bank prior to the Direct Debit being paid by the Bank.

Apparently, I cant.

So I contacted Direct Debit New Zealand, who were also as effective as a wet paper bag. Although they have said:

At directdebit.co.nz we are looking to increase the visibility of these
processes to ensure the “customer” controls the direct debit process more.

Which is nice.

So be warned. Here in New Zealand the Direct Debit system, which is supposed to offer us all sorts of protection, doesn’t.

The banks are ignoring their duty under the agreements we signed.Mad

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Comments

7 Comments on Watch those Direct Debits in New Zealand.

  1. Deborah on Fri, 20th Nov 2009 12:36 pm

    2. “Apparently, the only way to cancel the DD at the bank is to cancel my Credit Card and get a new one.”

    It’s official, I’m sick and hallucinating.

    D X

    Oh and I finally received my reply from the good Dr C. He seems to think I’m an unlicensed immigration advisor. (rolling around the floor laughing smiley inserted here)

  2. bettyl on Fri, 20th Nov 2009 12:47 pm

    3. I’m not surprise at your post. Really. Even though our bank has been very good about our money, I make sure to check back and double check things. Thanks for the post.

  3. Avalon on Fri, 20th Nov 2009 1:24 pm

    4. Deb – are you serious???? Even I havent be offically accused to actually breaking the law :)

    Almost finshed with my 12 page “missive” back to the Minister. Some of the things ive read doing my research makes my skin crawl.

    Betty,

    Good on you. I always check my accounts – so I will spot if ING try and filch some money. But I shouldnt have to. My Bank should be looking out for my interests.

    Bah Humbug!

  4. Lea White on Sun, 22nd Nov 2009 10:51 am

    5. Most of our things are set up as automatic payments which we set up ourselves and then we can cancel or change the amount at any time. It has worked well to date.

  5. Avalon on Tue, 24th Nov 2009 12:01 am

    6. Lea – I think thats where I went wrong. I set up a Direct Debit rather than an Automatic Payment. Still – the bank should work in my interest and not the insurance company!

    I will know for next time though :)

  6. Tim on Thu, 11th Mar 2010 4:48 am

    7. You can remove a companies authority to deduct money from your account by calling your bank…. However if the company that you have the agreement with is unethical they may have got you to sign more then one authority, so when they realise that you have cancelled the authority for them to deduct funds they simply send through a further request. Sometimes companies will even photocopy the direct debit form you signed and just change the date….

    I work for a bank and this happens heaps! There needs to be a major shake up of the law around this issue.

    The issue is further complicated by the public’s poor understanding of banking systems. There are occasions where customers give their credit or debit card number to the company to make payments. These CANNOT be stopped by the bank, under the bank’s contractual agreement with VISA or MASTERCARD (or any other credit provider) if a request from a merchant comes through and there is sufficient funds the transaction MUST be honoured. This of course is NOT a direct debit however a lot of people do get mixed up. The only way on the banks end to stop these is to cancel the card (as the card number is what is being used to access the funds.). But once again this does not work in 100% of cases.

    I have in the past actually had to close a customers account and open a new one to prevent illegal access by third party companies (this will work 100% of the time) as even if the companies are acting illegally, legal action to make them stop takes time…time in which they will take more payments

  7. Avalon on Thu, 11th Mar 2010 9:40 pm

    8. Thats really great info :) – but in this case – ASB refused to cancel a

    Direct Debit

    – where they were obliged to. They accepted the authority – but then refused to be bound by it. Thankfully the company taking the money did not try to filch more so we were ok, and i didnt have to make a fuss about it. Ive also managed to cancel payments by talking to the Visa Dept direct, but only in the UK. First Direct – my UK bank- had exceptional customer service, but the VISA dept often let them down badly.

    I don’t envy you working for a bank! In any country thats got be a tough job right now. I feel so bad for my Bank Manager. She is a star – but she keeps getting screwed by the loan department who have a tendency to stuff everything up, and then its up to me and the manager to sort it out.

    And I completely agree with you about how many people don’t understand how banks work. I’m currently trying to wrap my head around personal guarantees on loans – not easy.

    Hxxx

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