Bank fails to give a direct answer

THERE is nothing worse for a credit-card issuer than customers who refuse to pay their debts. Unless it is clients who insist on paying off their bills as soon as they receive their monthly statements.

Or so it seemed to Gavin Collins, who spent 18 months waiting for TSB to say YES and let him pay his credit-card bills by direct debit.

Mr Collins, a trainee accountant from West Kensington, London, was considering scrapping his TSB MasterCard, after a two-day delay in paying off his credit-card balance last month led to a charge of pounds 17.43 on his account.

He believes TSB's failure to reply to his original query reflects a desire on its part to earn as much as it can by racking up interest on the card.

TSB denies this. 'Our policy is that our clients are able to pay off their bills by direct debit if they want to,' a spokeswoman said. 'In the case of Mr Collins, we have just written to him informing him that he will be allowed to do so.'

This could be good news for Mr Collins, who wrote to TSB in September 1992, asking for this particular option to be made available.

He said: 'Over the past two years I have found direct debit to be a convenient way of paying off all my bills. Once you have filled in a form, you never have to worry again about post office queues, reminders in red ink and suchlike.

'It just seemed so silly that I could not do the same with my credit card. Although TSB said they would get back to me, they never did.'

Unfortunately, there is a sting in the tail. Anyone taking the direct debit option will find that the 28-day interest-free period is more than halved, as payment must be within 10 days of receiving the statement.

The bank spokeswoman said: 'This is something that only affects a very small number of our customers, but it is a service issue that is under review.'

TSB brought in payment by direct debit early in 1993, shortly after Mr Collins first wrote to the Independent to complain about the matter.

It is strange, then, that the person who actually requested the service should not have been informed when the bank introduced it early last year. Even odder is the fact that this change in TSB's practice has never been advertised among its credit-card clients.

The spokeswoman tried to explain: 'It is available, but we do not tell people unless they ask. It is subject to certain terms and conditions. We want to make sure that our customers know what is implied.

'Direct debits are not suitable for everyone. It may not be appropriate to have them in cases where a person has spent more than expected and becomes overdrawn when all the money is taken out of their account in one go.

'There may also be problems with people whose paydays are set at different times from the direct debit deduction. They may not have enough in their bank accounts to meet the debit.'

The logic seems to be that if you do not tell people that they can apply to pay off their credit- card bills by direct debit, your clients won't risk being tempted to apply for the facility.

The Co-op Bank also allows direct debit payments. These must be within 15 days of receiving the statement - the same as any other payment method - so there is no discrimination.

National Westminster and Barclays said they did not allow direct debits for credit cards. Although it does make exceptions, Girobank only allows the minimum to be paid by direct debit.

Midland Bank is also among those allowing only the minimum 5 per cent monthly amount to be paid off. Lloyds said it did allow the option for its gold card users, but not for ordinary cardholders, who can only pay the monthly minimum by direct debit.

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