Of direct debits, standing orders & subscriptions in Britain

RBS, Santander, Lloyds TSB, Halifax, Barclays, HSBC

This post has been in writing ever since I came to UK, got my own bank account, set up a direct debit and used my card for online subscription payments. Mind you, it has been a very unnerving experience since even after 6 months here, I am surprised when:

  • a transaction occurs 2 to 3 days before the given date of a charge
  • there is no acknowledgement or receipt sent by the company that has charged you a fee (which they will days before it is set to renew)

My 1st problem with banks and companies here in the UK is their understanding of dates. Mind you, it is understandable from a system’s perspective when a direct debit or standing order is executed the minute the clock becomes 12:00 am on the said date however, 2 days or 3 days before the date? REALLY? Is there someone actually processing the payments manually and taking the money on a horse cart to be delivered on time to the company? Wait…that is how people in 1st world countries think that banks operate in 3rd world countries. Well, let me set the record straight, if a transaction is set to occur on a date, then it does on that date. Not after and certainly not before. If it did, there would be riots.

Exhibition A: A direct debit is set for the 26th of the month. Now the 26th happens to fall on a Monday, so does the transaction occurs on the eve of Monday morning at 12:00 am? No. It occurs sometime on the eve of Saturday morning (friday night) 2 days before. And this hasn’t happened only when the weekend came between, this happens every other time. I do think I understand how the British devised this though, someone decided it was a good idea to calculate 30 days into the system so the date shifts by 2 or 3 days every time Feb comes and a day or two when Jul/Aug come. If this is true then believe me, no one does it this way. Just stick to dates and leave the calculations elsewhere. Your fragile banking system won’t collapse over keeping money more or less than 30 days.

Exhibition B: A free trial membership that starts on the 20th is supposed to be charged on the 20th or 19th of the month. Just in case you think it is safe to cancel it on the 19th think again, it has already charged your card on the 17th and there are no refunds. There is also no email or notification from the bank that you were charged or the website. Serves the free loaders right doesn’t it? Wrong. I call, complaint and write about it. Now I know when online reputation management exists; it is to curb such practices. I still sign up for free trials and if it is a UK based company, I setup a reminder to cancel my trial 3 days before. It doesn’t always work since this month alone, I got charged 2 days before the subscription was to end; luckily I got my refund. Phew.

Coming to my 2nd biggest problem with banks & companies here is their utter disregard for meaningful communication or lets state the obvious: customer service. To state an example, back in March 2012, I received an email from LinkedIn to try Job Seeker Premium, I gave my card details and before I could cancel it, I had been charged. The worst part was the surprise, since LinkedIn had never sent me a receipt for the payment at any point. Not when I signed up for the trial and certainly not when they charged me for it in April. All I have is an email stating “Welcome to Job Seeker Premium” and a few links on how I could use the extra features. This is actually the worst case scenario for any online merchant since they failed to acknowledge and give a receipt of charging my card at every juncture. Imagine how much fraud can go unnoticed with this.

I do not have unrealistic expectations from systems, since I can see a number of notifications from Paypal and every non UK based online company who always send a receipt even when payments are for a subscription (imagine that). It doesn’t hurt anyone, at least not since Gmail gave away storage to everyone and all the other email service providers had to cough up the space or lose out entirely.

Before moving here, I asked someone which bank is the best here (UK). I still remember his response, a pitying smile followed by the words “There is no concept of a good bank in UK, the only thing that you can measure is their online/self service banking  facility.” Golden words and so true.

Update Dec 2013: Now that I have actually worked in a bank there. I can tell you why this debacle occurs. UK bank systems (and possibly EU ones as well) switch to the next bank working date when the day closes. Yes, you’ve read that right, any bank holidays and weekends that may be coming in the way are ignored and the system automatically assigns the next working date to the system. So if it Saturday morning and the coming Monday is a bank holiday then the system sets the date for Tuesday. Hence any transactions set to run on Monday or Tuesday take place on a Saturday.

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