MSE News

Sainsbury's Bank customers charged after direct debit mix-up

Sainsbury's Bank credit card-holders have been hit with late payment fees after the bank changed its direct debit procedure and gave customers incorrect information about how the new system worked, MoneySavingExpert.com can reveal.

The bank's website advised customers that under the new system amendments made to direct debits would come into effect within three days – but in fact it could take several weeks. As a result, a number of customers have been caught out and missed payments. 

One MoneySaver affected by the issue contacted us worried that his credit score had been damaged, after he was hit with a £12 missed payment fee – and others have flagged similar issues on social media.

But after MoneySavingExpert contacted Sainsbury's Bank, it apologised to the customer, refunded him and offered compensation too. It says it's also updating the incorrect information on its site. 

If you've been affected by this issue, you should get in touch with Sainsbury's Bank. It says it will be happy to refund any money lost and update your credit score.

For a totally free way to boost your credit chances, see our Credit Club.

How customers have been hit

Iain, the MoneySaver who was charged a £12 missed payment fee, first alerted us to this issue. When we looked into Iain's case and contacted Sainsbury's Bank, it refunded him and gave him an extra payment of £50. 

After the issue was sorted out, he told us: "I was rung by a very apologetic customer services agent, and he will arrange for my credit score to be reinstated.

"He offered me £50 compensation and I didn't expect this, but of course I accepted."

He also thanked MSE, adding: "I don't believe I would have gotten this much attention had it not been for your timely intervention."

Iain's not alone though – we've seen a number of similar complaints on social media:

What exactly is the issue and how can I avoid it?

Sainsbury's Bank says that in July it introduced a new process for customers to change the direct debit that pays off their credit card balance.

Previously, customers had to put in a request online for a member of staff to alter the details of their direct debit – for example, to change the date it leaves their account – and this change would then manually be made by a staff member, who if necessary would check that arrangements were in place to pay off the next month's balance.

However Sainsbury's says that under the new system, a request made online is processed automatically.

What's causing confusion is that when a customer requests a change, their old direct debit is cancelled immediately and the new direct debit will only be applied to the next month's statement – so for the next month, you may need to make your own arrangements to manually pay off your balance.

Under the old system, because the change was manual, checks were made to make sure. But this no longer happens – and to make matters worse, the Sainsbury's Bank website wrongly told customers that changes to direct debits made online would come into effect within three days.

I've been hit with a late payment fee – what can I do?

If you've changed a direct debit, missed a payment and been hit with a late payment fee as a result, contact Sainsbury's Bank to make sure your credit score isn't affected to get a refund on the fee you were charged.

The bank says it will help all customers that were charged due to the wrong information on its site. You can contact Sainsbury's Bank customer services by calling it on 0131 549 8040.

A spokesperson for Sainsbury's Bank said: "We're sorry our direct debit charge process wasn't clear online.

"We've refunded the charges on Iain's account, and this will have no impact on his credit record."