# Mortgage payments direct debit problem



## handtight (9 Apr 2013)

We have a relatively small mortgage and are not in negative equity, however due to reduced income and burden of servicing other debt we were granted an interest only arrangment about a year ago. AIB are now insisting we resume full repayment on the mortgage this month. We have submitted a proposal to extend the mortgage term which they say will take 6 weeks to consider. The repayments are so large that we will be unable to meet other debt repayments not to mention utilities etc. Is there anything we can do to stop the bank extracting this money by direct debit? 

I could lodge my salary cheque to a deposit account elsewhere but my concern is that this would antagonise the bank thereby compounding our problems. 

Any advice on how to proceeed would be greatly appreciated


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## wbbs (10 Apr 2013)

Cancel the direct debit and make any payments manually in branch or set up standing order.


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## munchy (10 Apr 2013)

Yes, I did that. I handed a letter into my bank saying that I was cancelling my direct debit, and then handed them another letter asking for standing orders to be set up for a fixed, reasonable amount which I was able to afford. BOI made a hash of it, but it is possible.


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## handtight (10 Apr 2013)

Thanks to Munchy and wbbs for the advice.

It's embarrasing to admit but I was under the impression that the D/D is controlled by the creditor which is sets this method of payment apart from the old SO. Wrong obviously! While I'm tempted to cancel straightaway I thought I would first ask the bank for a short term OD to plug the hole from the increased mortgage payment - €2k pm. 

In the event this is refused I can cite their inflexibility as grounds for cancelling the DD - really a last resort.


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## cremeegg (11 Apr 2013)

You are generally correct that the D/D is taken each month by the creditor, who sets the amount. However you can just cancel a D/D at any time.

If your mortgage is small it probably is in your best interest to prioritise paying it each month.


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## 44brendan (11 Apr 2013)

if you continue paying an affordable amount you are co-operating with the Bank and obviously they should not r-commence DD for full P&I repayments when you clearly advised them of inability to pay same. However DD is probably automatic and bank should have no issue with you cancelling sme and paying an affordable amount pending formalisation of any extended agreement.


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## handtight (17 Apr 2013)

Appreciate the advise which I followed; I wrote to AIB saying I was cancelling the D/D and explained I would maintain payments I can afford. No response to date, of course I also proceeded with the cancellation. I was questioned by the teller in the branch who made it clear my action wasn't quite kosher - he wanted to know if I had discussed in advance with the mortgage team! 

The Bank's response to my forbearance proposals is due in about a month and will post again at that stage.


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## munchy (17 Apr 2013)

handtight - is your mortgage with the same bank as your current account? That may explain the attitude at the cashiers desk. 

I also had a very snarly response from the BOI customer services person, despite my mortgage being with the EBS. I also left them a second letter to start a standing order for a fixed amount and they just didnt set it up and didnt write or call to explain why. I had to chase them and send in another letter before the standing order was set up and I missed a payment as a result. So keep an eye on your account and make sure they have all the details to set  up the s/o


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## handtight (20 Apr 2013)

Thanks Munchy and apologies for delay with reply. Yes, the current account is with the same bank. As you say need to ensure my instructions are complied with.


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## handtight (25 Apr 2013)

Folks, I'm at my wits end. Having cancelled the mortgage DD in writing 10 days ago I checked my account today and guess what? The bank have simply ignored my instruction and debited my account by 2K. As a result I now have a substantial unauthorised overdraft which of course will attract further charges. 

This is despite writing to them last February saying I was not in a position to resume full repayments and asking for an extension of existing interest only or some other long term solution. 

I'm totally depressed and stressed out by this latest turn of events and not sure where to turn.


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## wbbs (25 Apr 2013)

Contact them tomorrow and ask for it to be refunded as the mandate was cancelled.


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## mark71 (25 Apr 2013)

Get on to them first thing tomorrow and tell them you have a copy of the letter sent to them and proof of delivery.

I had something similar happen after instructing the bank to stop my buy to let mortgage after cancelling it my end. I checked my account and found they had took the money through my home mortgage direct debit instead.

I've now cancelled that one also and pay by ringing them with a debit card.


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## handtight (26 Apr 2013)

Thanks guys I had no idea the bank would resort to this kind of tactic. I will certainly get in touch today 

mark71 when I said I put it in writing I actually signed a DD cancellation form in the branch so don't have a copy - maybe I should have requested a copy at the time


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## wbbs (26 Apr 2013)

To be honest I would call it inefficiency rather than a tactic.  There are two things happening with a direct debit, the person owed debits your account for the money (the opposite to a standing order where you control the sending of money), the person owed would not know always know a direct debit mandate had been cancelled, now I know in your case it's the same bank but just for explanation purposes bear with me!  So the person owed the money still goes ahead and debits your account, then the current account holding bank should reject that debit as the mandate has been cancelled so often you can find that the debit goes through as the owed bank collects but is then claimed back by the current account bank when the system realises there is no valid permission in place to pay it.

In other words sometimes these things right themselves the following day when the system spots the error, in your case while the bank cancelled the direct debit mandate on your current account they obviously did not do the cancellation on the mortgage side whether deliberately or not who knows!


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## handtight (27 Apr 2013)

Thanks wbbs for explaining the complexities of the DD process. A friend says given a choice between a conspiracy and a cockup, chances are it's a cockup. This applies here as the bank wrote yesterday to say I needed the two mortgage signatories to amend or cancel the DD. Bank 1 Me 0. Stupid mistake but have to say I was so stressed I wasn't thinking clearly. Coincidentally there was also a message saying they want to discuss my rescheduling proposal on Monday so here's hoping for a good outcome....


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## wbbs (27 Apr 2013)

That might be right from the point of view of cancelling the direct debit instruction on the mortgage, however I presume the account you pay it from is repayable on one signature only i.e. either of you can make withdrawals.  If it is and it must be or you couldn't operate direct debits on it, then if you signed to cancel the mandate to pay the dd on that account I would have thought that instruction was valid.  Only half the job was done correctly but if the bank do not have your permission to pay it on one side then whether you signed on the other side or not I would have thought they could not collect!  The direct debit instruction is still in place on the mortgage but the permission to pay is not there on the current account, my theory anyway!


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## handtight (7 May 2013)

Just to report progress on our mortgage problem. The bank have agreed to reschedule over 10 yrs which reduces the monthly payment to a more affordable €550. It's a tracker mortgage but this hasn't been flagged as an issue! The new arrangement will be backdated to the April payment which should sort cash flow problems arising from the €2k debit when they ended the interest only arrangement. 

Thanks to the various posters for their support and advice during a period when we grabbled with unfamiliar problems and processes.


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