Card transactions by proxy

Ian Batten igb at
Wed Apr 6 08:34:44 BST 2011

On 6 Apr 2011, at 08:03, Matthew Pemble wrote:

> On 5 April 2011 19:01, Clive D.W. Feather <clive at> wrote:
> I've had one problem with DDs. One day I checked my statement to find a DD
> payment to someone I'd never heard of. The bank kept telling me that I
> would just get my money back under the DD Guarantee, but took ages to
> understand that I couldn't invoke it because I didn't know who the payee
> was and didn't have a DD with them. It got sorted in the end, but took a
> while.
> I though the DD Guarantee was provided by the bank, not by the payee? 

It is, but bank staff get it wrong.

"If any payment is made in error, you should contact your bank or building society who are responsible for giving you a full and immediate refund - even if the original error was made by the organisation collecting the payment. "

 It's one of those strange things where bad stuff happens at the bottom of the system that would horrify the seniors, and yet the junior staff think what they are doing is what the seniors want.  Students of organisational foul-ups will recognise the symptoms from dealing with BT, the NHS and other large bodies, where individual staff arrogate to themselves positions and powers that the company would immediately disown.   For some reason, customer-facing staff have a misaligned view of the organisation's priorities, and behave in a manner that is contrary to the interests both of the organisation and of the customer in front of them, because they think that they understand the company's "real" priorities better than the company itself.   There can be issues of perverse incentives, too, of course, but I doubt that applies here.

If you speak to compliance people within banks, they are absolutely clear about the DD guarantee: payments contested by the customer should be refunded first, and chased with the originator afterwards.  Firstly, that's the legal position, so they have no choice.  Secondly, the FSA are currently on the warpath over customer complaints and are waving fairly big sticks, so things that generate reportable customer complaints are to be avoided.  But thirdly, cavilling over DDs makes no sense commercially anyway.  Both the bank itself and the originating organisations as a bloc have powerful incentives to convince people to use DDs: it's cheaper, less error prone (in the large) and easier than all the alternatives.  Occasional horror stories (and no system is foolproof: as people working in security we should understand residual risk better than most) discredit the system, and cause people to resist moving to DDs.  If you could sit in a room with your friends and everyone either had never had a DD problem or it had been resolved with a single phone call, the refusers would look silly; if there are stories in which it takes an age to fix the problem, the refusers look entirely reasonable.  

So customer service staff in banks who talk nonsense about DDs (specifically, that you need to take it up with the originator) are probably allowing an emotional "defend my position at all costs" response to cloud their judgement, or just don't understand the process.    I'm afraid to say that the best thing to do is to immediately raise a formal complaint, making it clear that you are unhappy with the actions they have taken and you wish to have it referred formally as a reportable complaint.   Get your bank's complaint procedure and follow it, making sure they stick to the timescales.  That will get their attention very quickly, because aside from anything else a front-office member of staff who generates a reportable complaint about something that should have been resolved immediately and was entirely within their own control will only do it once.


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