Direct Debit refund shambles

[#1]

If Mand or Jameseh are reading this, please have a look at Ticket 28082381.
My billing month is from the 28th to 27th, and on 28th Feb I moved from BBYW Option 1 to Plusnet Value.  PN raised an invoice for £5.99 on 28/02/09 and my bank account was debited with the payment by Direct Debit (DD) on 04/03/09 - time taken 3 business days.  On 06/03/09 another £5.99 was debited, which on looking at my PN transactions was in respect of a second invoice dated 01/03/09 - time taken 5 business days.
When I called PN I was told the second invoice was raised in error and that a refund would be made but could take a week  to 10 days to reach my account..  When I queried why it would take so long, she informed me that she did not work in the finance department and had been instructed to give that message.  I then raised a ticket asking for an explanation because in my opinion it should not take more than 3 or 4 business days for the credit to reach me.  If PN were to use the Faster Payments System, introduced by the banking industry in May 2008, the credit would have reached me within hours!  The response to this was that the refund has to be returned by the same method as it was taken and this could take between 2 and 14 days to arrive;  also "The delay in the processing of these payments is by the banks themselves as our processes are fully automated and the refund is sent within a matter of minutes to our bank."
I will not bore readers with the subsequent exchange of messages, but yesterday I informed PN that if no credit appeared in my bank account by this morning, I would claim a refund from my bank under the DD Guarantee, and that although I knew this would probably cause confusion in their accounting system, that problem was theirs not mine.  I duly claimed from my bank this morning and the refund was credited within an hour.
It is not the amount that concerns me but the principle.  Once a transaction has entered the banking system, it should take no more than the normal banking cycle of 3 or 4 days (depending on when it was submitted) to complete.  It is utter rubbish to talk of delays of 10,12, or 14 days, or as this morning's latest reply tells me, "The refund has been submitted to your bank, please be aware that a D/D refund can take up to 3 weeks to appear in your account."  If it only takes 3 days for PN to get the money from my account, why should it take any longer for the refund to arrive?
I am told by PN that they do not use the Faster Payments System, but I would suggest that it is time they rethink their policy as this method has now been available for over 9 months.  Refunds to customers must surely be a rarity in relation to the thousands of invoices and DD's processed each month, and surely correcting mistakes and refunding to customers should be done by the fastest possible method.

[#2]

Am afraid this is what happens in most companies. For example the AA took £70 to much from our account on the 27th of Feb, we rang them and they are issuing a refund of the different between the actual payment and what it should be. Guess what, still not credited, we've been told 11 working days. So that would be tomorrow for us. I should have arranged a direct debit refund due to it being their error however I decided to give them the benefit of the doubt.......
Anywho what I'm trying to say is that things like this happen and thats what the direct debit g-tee is for, to protect you and me. Its not really a shambles, its how the refund is processed that doesn't work in this modern banking world we live in

[#3]

This is an ongoing issue that several of us customers have with Plusnet.
But they do not REALLY want to solve the problem other than short term, month by month  manual fixes 

[#4]

Emma - Thanks for your reply.  I appreciate what you are saying, but the problem these days is that too many organisations try to pass the blame for their own inadequacies onto someone else - in this case the banks.  I know banks are not very popular at the moment, but in my many years of dealings with them as an accountant, it is not often that they completely 'foul up' transactions, particularly routine things like moving money around.
My own feeling is that PN's in house procedures for returning money to customers are not as good as they should be.  It will be very interesting to see if a DD refund of £5.99 from PN ever reaches my account.  If it does then of course PN will have to put through yet another DD to recover it as my bank has credited me and reclaimed it from PN.  Initially I deliberately chose to notify PN of their error, rather than claim through the DD Guarantee, in the (vain) hope they would return the money speedily, but it seems I was wrong!

[#5]

Hi there,
I'm very sorry for the repeated billing instance.
Our automated refund process does take 7-10 working days for the refund to complete, and as you rightly point out, that once the direct debit has been initiated, this takes (generally) 3 working days for the payment to be taken.  I'm afraid that I don't know enough about how our billing system to know exactly why the refund takes this amount of time, but I promise you that you definitely will get your refund.

[#6]

The problem with a 7 to 10 day refund time is that the customer is losing interest on that money whilst it is out of the account. Also is that 7 to 10 days, calendar days or banking days? I am just guessing. but I think most of the problem issuing refunds stem from the fact the companies like to run a payment days, which usually seem to be a the best once  a week (normally a Friday from my experience). This means if the customer is out of pocket on the Monday, the refund does not start going through the banking system until Friday. Hence 7 to 10 days before it hits the customers account from initial debit.

[#7]

Thanks Jameseh for you comments.  Isn't it about time that your colleagues who reply to ticket posts are armed with CORRECT information instead of trotting out fatuous mis-information such as taking anything from 2 days to 3 weeks for the refund to complete?  It is this sloppy attitude that annoys customers.  Furthermore if you look at the first reply to my ticket 28082381 you will see he alleges that "The delay in the processing of these payments is by the banks themselves as our processes are fully automated and the refund is sent within a matter of minutes to our bank (my emphasis)." which is plainly untrue.
I note you say that I will definitely get the refund, but I think you should warn your accounts department colleagues that if they have already set it in motion, then they will have to recover it from my bank account as my bank have refunded it to me and will be claiming it from Plusnet.
I regret to note that you have made no comment regarding my suggestion that PN should review their policy of not using the Faster Payments System.

[#8]

Hi Chaldon,
I wasn't intentionally ignoring you.  But there's little use on my commenting on a system that I don't know anything about, nor whether it would offer compatibility with our own billing system without considerable periods of development work.

[#9]

Even without changing to the Faster Payments System the maximum time it takes to credit an account as cleared funds is 4 Banking Days. On day 3 it may show on the account but it will not have cleared. Any additional days outside are either down to the sender not advising the bank to make the payment or in the cases were your account is not held by a bank, the payment being paid to a holding account and then transferred to your account. This should only add an extra days, but some banking institutions / CC Companies have been known to hold on to the payment for over two weeks in the holding account before allocating it to the customer.

[#10]

Hi Jameseh - I hadn't considered you were intentionally ignoring me.  However as you and your colleagues sit in the hot seats answering customer complaints, would it not be sensible to become more acquainted with the details of the topics with which you are dealing?  If any of you do not know the precise answer to a point, then surely you should consult with someone who does know before giving out potentially misleading information.
Regarding my suggestion about using Faster Payments I would suggest it is 'passed up the line' to those in authority.  As I said in my first post above, I would imagine refunds should be relatively rare in relation to the total transactions processed, and to keep your customers happy, mistakes should be corrected by the fastest possible means.  As Spider pointed out the customer is at present without the use of funds for an unnecessarily long time, and depending on the amount involved, could incur bank charges and/or interest for an unauthorised overdraft.

[#11]

Hiya,
I'm just spoken to one of our senior members of the finance team.  "Faster Payments" isn't something that we have control over.  It's controlled by the bank that you use and our bank (Barclays) do not offer this for their business customers.  He mentioned that they may offer it on personal accounts, but not business ones.
Regarding the refund process on Direct Debit payments, I've also learnt something new today.  We don't refund by Direct Debit, as that isn't technically possible.  It's a manual process.  Basically, all refunds for payments by Direct Debit go into a BACS refunds file which is manually signed off and processed once a week and then take 2-3 working days for the payment to reach the customer.  So it would potentially take up to 2 weeks for a refund to be received.

[#12]

The Faster Payment system does not cover Direct Debit transactions. It cover Standing Orders.
Could PN use Faster Payment for refunds as Direct Debit is controlled by BACS and Faster Payment is controlled by APACS?

[#13]

Hi itsme,
As I posted above, Faster Payments is governed by the bank itself, and our bank does not offer it on their business accounts.

[#14]

I thought that might be the case but it would be interesting to see if they except Faster Payments into a Business account and only block outgoing payments using this method.
Edit: The reason that banks are reluctent to use Faser Payments on Business accounts is that they will lose income from the CHAPS system.

[#15]

There is a related issue. I received an email notifying me of the forthcoming DD payment. It was clear that I had been transferred to the wrong product and overcharged, Despite immediately updating a ticket pointing out the error and speaking with JamesEH the following day I was told that the DD could not be stopped. I could have blocked it at my bank and  removed my credit card details from my account,  or claimed a refund from my bank afterwards but I suspect that this would have resulted with me ending up with no phone or broadband services. I would not worry about inconveniencing the Plusnet finance team but it wasn't worth the hassle for me for the small amount involved.
There needs to be a longer period between being notified of the DD about to be taken and the payment actually being taken. It needs to be possible to stop an erroneous DD being taken. That way there would be less need for refunds in the first place.