Gransnet forums

Ask a gran

No Direct Debit means bigger bills!

(36 Posts)
paperbackbutterfly Thu 15-Mar-18 10:26:45

I think it is so unfair that my 87 year old Mum has to pay more for services like gas and electric because she refuses to pay by direct debit, won't have a debit card and still carries a cheque book and cash. Yes, I know she is old-fashioned in her approach but she likes to know where she stands with her money. It is costing her a fortune! I have offered to pay the bills for her using my bank account but she refuses. Why do services cost so much more when she is paying her bills on time?

Nonnie Thu 15-Mar-18 10:29:07

They cost more because the admin is so much greater and has to be done manually rather than automatically. It really is that simple.

Bathsheba Thu 15-Mar-18 10:33:19

It does seem unfair but quite simply, the reason is that if you pay by DD it cuts down on admin for the utility companies. They don't have to process cheques, all payments are automatic, they don't have to use employee time chasing up bad payers and keeping all the data records associated with that. So it saves them money and they can pass on that saving to their customers.

Bathsheba Thu 15-Mar-18 10:33:44

X posts Nonnie

Cold Thu 15-Mar-18 10:56:28

It costs much less to administer a paperless system: no paper bills, no postage, no manual checking of cheques, no 3 day wait for cheques to clear etc - instead all done by computer.

It is a unfortunate that being stubborn is costing her money - my mother used to be a bit like that - but when she was ill my brother took over managing her money, put it all on direct debit and gave her a spreadsheet showing her payments each month

Welshwife Thu 15-Mar-18 12:17:21

They also take the amount they want and make you wait ages for a refund or only give it to you if you ask! I used to keep a very close eye on our DD for water, electric gas etc when we were in the U.K.

spyder08 Thu 15-Mar-18 12:23:40

Same with me Cold...recently taken over running my 90 year old mothers finances and have put her on DD for her energy. Cheaper and much less hassle.

Nonnie Thu 15-Mar-18 12:50:31

Welshwife I think the law has changed and they have to give you the money back if you have overpaid for a certain period of time. I believe it is no longer necessary to ask.

There is consumer protection for pretty much everything now which I think is a mixed blessing. It is good for those who are not able to sort things out for themselves but I wonder if it makes some people lazy? Nowadays banks have to tell you when your fixed term interest rate is stopping which means that those who are on the ball don't get such a good rate as they used to. Consumers seem to believe they have no responsibility for anything and expect to be compensated even when it is their own mistake. Yes, of course I feel sorry for people who are scammed but when they have given all the information away to the scammers is it really fair that the shareholders of the banks have to foot the bill for their mistake?

Sorry, perhaps I should have started a new thread.

NanaMacGeek Thu 15-Mar-18 13:16:08

You make an interesting point, Nonnie (even if it should be made on another thread). One of the main reasons that the type of scams you mention are successful, is that the scammers are able to open an account in someone else's name so that money can be transferred. I can see absolutely no reason for that to be able to happen. Banks should have a duty to check that new accounts being set up are for legitimate purposes and the new account holder is who they say they are. Many of the scams where people are asked to transfer money to a new, ‘safe’ account set up in their name or the email scam where a last minute change of bank account appears to come from a conveyancing solicitor, could not take place without these rogue accounts being set up. So, in this specific area, I think the banks should take on the responsibility for compensation.

M0nica Thu 15-Mar-18 17:52:03

Would she accept Direct Debits if the she could have it for her standard quarterly bill rather than a monthly direct debit?

I refuse to pay utility bills by monthly direct debit because so many people have hassle with the UC over how much the DD should be at a monthly rate, and getting money back if there is a surplus. I still pay quarterly on receipt of the bill, but do it by DD.

Deedaa Thu 15-Mar-18 21:50:46

I had endless arguments with my MiL (who was only 17 years older than me but could have been from another century, never mind generation!) She refused to have a debit card or pay by direct debit. She would hand me her bills that needed to be paid together with the cash and ask me to pay them "next time I was in the Post Office". The only time I went into the Post Office was when I had to pay one of her bills and it always meant a special trip. Eventually we had Power of Attorney and the first thing we did was get a debit card! And the second thing was to set up direct debits! She was always so keen on keeping control of her money but by keeping track of the account while I was using ATMs I had a far better idea of how much money she had.

jenpax Fri 16-Mar-18 07:46:29

Direct debits are only problem free if you know that there will always be enough money in your account to cover them! I get annoyed when people go on about them as if the only reason people fall behind with bills is forgetfulness and assuming everyone is comfortable money wise🙄
lots of families on low incomes, those who work for agencies or in zero hours contracts,and anyone relying on welfare benefits, find themselves living hand to mouth with no buffer room. so if an employer doesn’t pay the wages on time, or there is a hitch with benefits, they have no money in their account to cover direct debits!
I find that many people in this situation prefer to pay by payment card or cash to avoid bank charges for bounced payments😳

Nonnie Fri 16-Mar-18 10:07:40

NanaMG I think banks already have a duty to ensure that new accounts are genuine but seem to fail quite often. I think it would be a simple matter for them to set up a program which would show a new account receiving money which repeatedly went out to an account abroad or an account in a different name. If money in an account is going out to pay normal household bills it looks correct but if money is repeatedly coming in and instantly going out to a suspect account I think that should be flagged up as suspicious.

Margs Fri 16-Mar-18 10:37:15

It gives the utilities the right to whack up your Direct Debit anytime they like by as much as they like - with that twee little note at the side of the bill: "You don't have to do anything - we'll do it for you".

Oh no you won't!

Amma54 Fri 16-Mar-18 10:51:55

It's not more expensive to pay bills as they arrive rather it's cheaper to pay by direct debit etc. This may seem a bizarre argument but it is how the banks view it. So those of us who pay by DD or SO get at discount off the full price.

grandtanteJE65 Fri 16-Mar-18 13:20:25

Are we discussing direct debit from your mother's current account or for a separate account that money is put into each month for paying bills?

I can well understand your mother if bills are being paid from her current account, as she probably feels she never knows exactly how much money she has in it.

If you set up a separate account, having worked out what exactly is being paid by direct debit from in in the course of a year and transferring a 12th of that amount from her current account on the 1st of each month, she might just be willing to accustom herself to is, and save the expense of paying by cheque.

Obviously, you or another family member need to discuss this at length with her, and perhaps help her tackle internet banking as well.

My mother had always paid all the bills from her cheque account, but a month after her death, Daddy informed me that on the advice of his bank, he had set up a direct debit, as thus he was certain nothing would be overlooked, which as he truthfully said was likely to happen if he had to pay the bills. It worked well for him, perhaps because it was entirely his own decision, which I heartily endorsed.
I knew only too well that I otherwise would have had to cope with his bills as well as my own! (Said the dutiful daughter!)

rockgran Fri 16-Mar-18 13:43:33

I agree Amma54 - it is not more expensive to opt out of Direct Debits, online banking, etc. - just cheaper to opt in. I used to have this argument with my MIL but to no avail.

sarahellenwhitney Fri 16-Mar-18 13:54:16

Does your mother use any ?online services? When I introduced my late mother to my PC she was hooked.
She bought herself one and soon went into online banking for paying her bills.However she did request paper statements.

Franbern Fri 16-Mar-18 15:23:33

Managing on a limited monthly budget, I must say, that I find the DD way of paying my main bills helps me to ensure that I have the money available.
Each one of my monthly payments are listed, so I know exactly what I am paying out each month and thereby what I have left for anything else.
It also means that my fuel bills are spread out over the whole year, and my energy company always repays me automatically, if my account goes into more than a £100 credit.
All other items are paid by a credit card which is automatically paid off in full each months. I keep a running total of what I use that for, so know exactly what that bill will be.
For me, I find this a far better way of keeping total control of my costs, rather than waiting for bills to arrive and then paying them by cheque/cash, etc.

Bagatelle Fri 16-Mar-18 17:03:15

What bothers me is that those who need cheap energy the most are the ones who can't have the cheapest tariffs because they can't have bank accounts with direct debits and they can't shop around on uswitch etc. for the most competitive rate.

Handling cheques and/or cash is expensive, though. It is reasonable to offer discount for those who are prepared to make automated payments.

janeainsworth Fri 16-Mar-18 18:36:22

margs companies cannot just ‘whack up your direct debit’ on a whim.
They have to give you 3 months’ notice, which is plenty of time to challenge the new payment if you feel it is unjustified.
I agree with amma. It’s not an extra charge for paying by cheque, it’s a discount for people who are prepared to reduce the company's costs by paying by DD.

Deedaa Sat 17-Mar-18 21:15:37

The biggest problem I think is families that have to use pre paid meters for gas and electricity. It's usually because they are in financial trouble to start with and then they are charged a higher rate! Keeping it charged up is just another worry you could do with out.

GabriellaG Wed 21-Mar-18 04:19:27

Margs
Companies have to give you due warning (post or email) of their intent to take a highter amount via DD.
Bills are electronically generated, therefore, are sometimes out of sync with your true usage.
To give an example. My water bill is that of a low user but TW computers raised my DD by £5pm from April because I'd used 1 cubic meter more. It therefore decided that my overall yearly usage would be 12 cubic meters MORE than usual and adjusted the DD accordingly.
I rang the billing dept and they reassessed it manually back to the original DD payment.
It just takes a free phone call to sort it.
If you ARE using more (of whatever utility) then one can expect to pay more but they have to notify you of their intent.
It's primarily to stop customer debt.

GabriellaG Wed 21-Mar-18 04:27:53

janeainsworth

Charleygirl Wed 21-Mar-18 08:45:29

My aunt, when she was alive, refused to pay any bills by D/D for years because she needed the exercise, walking perhaps to the bank or a post box to post a cheque. Fine until she could no longer do this physically and she even thanked me when I set up a couple of D/D s for her.

She was a liability because she could rarely remember her credit card number so when she visited her local small supermarket she would wander in reciting her card number eg 1234 as she walked around and informed everybody at the till. How she was not robbed I have no idea.