This blog is by way of a public service announcement. Did you know that you can close your account with a bank, destroy the credit card, send it back and give written instructions that no future payments are to be made against it, yet in some circumstances, the bank will continue to make payments against your card? This can go on until the expiry date of the card has been reached – several years in some cases.
Last September I closed my business account with Alliance & Leicester/ MBNA. They had made so many mistakes and been so unhelpful in sorting out those mistakes in my banking, failed dismally to correct then and caused me to waste so much time, that I had to make alternative arrangements. I closed my credit card at the same time – cut it up, sent it back, gave written instructions that under no circumstances were any more payments to be allowed against the card. After a couple of months I discovered that closed doesn’t really mean closed when it comes to direct debits. A&L/MBNA kept paying out, regardless of my requests to stop.
When I queried it (and only at that stage) the bank said I had to cancel my direct debits. I asked them what direct debits were set up to be paid by the credit card. As I had held a business credit card with them for several years I wasn’t really sure what was being paid by direct debit. Most banks will tell you what these payments are so you can cancel them all. But if like me you have the misfortune to have a credit card with Alliance & Leicester/ MBNA they won’t tell you. You have to guess. What a nightmare. It was all a bit hit and miss, but I managed to nobble all the main direct debits. Then eight months after I closed my credit card, I found another payment had been put through. This time it was an annual subscription which was paid initially by credit card. My view is that A&L should not have paid it (and as there is evidence that they had bounced at least two direct debits then it gives the lie to their assertion that it has to be paid).
We are now having a lively dispute about it. It’s very wearing and they are being exceedingly unpleasant. Interestingly, even now they are still being incredibly incompetent. We moved offices some months ago and have advised them in writing (several times) of the change of address, but the chaps in their debt collection department are still writing to the old address. So if you have a credit card which pays anything by direct debit or has made any other automated payment, for example, an annual subscription, the bank will go on paying it, even when you have closed down your account and cancelled your credit card in writing.
The moral of the story is don’t use your credit card to set up direct debits or pay subscriptions. Unless you have a perverse taste for wasting time with corporate jobsworths in anonymous call centres, or have hours of time to unravel the problem and/ or the patience of Job, you will end up with a huge problem and an even huger headache. I have got a complaint in with the Financial Ombudsman Service, but in the meantime I’m off to lie down in a darkened room...... To avoid the risk of costly employment law mistakes, and complaints to a higher authority, take a look at our book 101 Tips for Employers.
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