Direct Debit Setup Fee: Commonplace?

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Kraven

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#215537 1-Jul-2017 13:14

TLDR: Does you bank charge you a fee to setup a payment via direct debit?

So it has been a few years since I've arranged to pay bills via direct debit, opting instead to pay via credit card. However, with more companies adding surcharges for paying via credit card, I figured I would opt for direct debit as a payment method on my recent move to Electric Kiwi.

The process for setting up the Direct Debit was straight forward and all done online as part of the signup process for Electric Kiwi. Today I see my bank has charged me a $5 "Direct Debit Setup Fee".

I've been with my current bank for just over three years and haven't set up any new authorities in that time, they transferred existing authorities over when I moved. The fee does appear on the schedule of fees for my current bank, however I have no way of knowing if the charge is a recent thing. It doesn't, that I can see, appear on the schedule of my previous bank, nor was I ever charged such a fee by them.

Given the likelihood that I will be setting up more direct debits as a payment method in the future, getting hit for $5 each time is dissatisfying.

So, does anyone else get charged this by their bank?

Note: I haven't disclosed the names of any banks as I'm just interested to see if this is commonplace across all banks. If you love your bank, feel free to name them, though!

floydbloke

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#1810065 1-Jul-2017 13:38

BNZ does.

I personally avoid Direct Debits as much as I can though. It's not that I believe companies are willingly going to take my money when they're not entitled to, but I like to be in control when there is a bill to be paid particularly when there is a dispute or error on said bill.

Organisations are a lot better at receiving your money than they are at refunding it.

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cokemaster

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#1810067 1-Jul-2017 13:48

In my experience the only bank who charged direct debit fees were Kiwibank. I've never come across this fee with any other bank that I bank with (ANZ, Westpac, ICBC or HSBC).

I've subsequently dropped Kiwibank for partly this behave and not being prepared to 'kick the tyres' on our banking solution... something which all the other banks have no problem doing.

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k1w1k1d

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#1810111 1-Jul-2017 16:06

Can't remember Westpac charging a setup fee for our direct debits, but wouldn't have been too worried if there was a $5 fee.

We have just about all our bills paid by direct debit. Very convenient, don't forget to pay anyone, etc.

You always get a bill a few days before payment is due, so time to query it if there is a mistake. Never had a problem.

Geektastic

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#1810121 1-Jul-2017 16:28

I don't think so. ASB used to charge even for storing bill payment details you loaded for repeat use, but fortunately that small rip off seems to have gone away.

rphenix

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#1810140 1-Jul-2017 17:09

cokemaster:
I've subsequently dropped Kiwibank for partly this behave and not being prepared to 'kick the tyres' on our banking solution... something which all the other banks have no problem doing.

They can and will - provided you get another offer from a bank and go back to them even if they say they wont - they will beat it at least if you have a mortgage.

sleemanj

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#1810363 2-Jul-2017 10:31

Kiwibank ($5), TSB ($3) and BNZ ($5) all do charge to establish a direct debit. I don't know about others

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#1810393 2-Jul-2017 12:28

rphenix:
cokemaster:
I've subsequently dropped Kiwibank for partly this behave and not being prepared to 'kick the tyres' on our banking solution... something which all the other banks have no problem doing.

They can and will - provided you get another offer from a bank and go back to them even if they say they wont - they will beat it at least if you have a mortgage.

I've been with them twice now. The first time, I asked to kick the tyres... it was outright rejected and no one was prepared to speak to me about my mortgage... I even asked to speak to the retention team only to be told that the retention team do not take phone calls and that they'd call me back. My next call was to ANZ, who looked after me (their service was excellent!). Kiwibank retention called me TWO WEEKS after I had moved to ANZ to say that they were prepared to allow me to refix without penalty. Many lols.

My second time - I had a fixed term up for renewal. I also noticed that a floating discount wasn't applied to all of the accounts... I called up, couldn't get anywhere. Emailed retention and pretty much got the boiler plate "Kiwibank has competitive rates, you are a valued customer, what rates you see is what you get" response. I did get a phone call about refixing but they didn't offer anything special and when learning of my intention to leave, didn't do anything to try and win me back.

Interest.co.nz has Kiwibank rates being at some of the highest too - I don't mind... but it means they have to come to the party with "special rates".

If I have to engage another bank - generally I will leave. ANZ were very good, I was very reluctant at leaving but the local Kiwibank branch manager made a very compelling case and the rates at the time were far below what ANZ could offer. As soon as the mortgage was settled - I had to deal with their contact centres with no dedicated account manager. When I did my look around, HSBC not only offers great service... they have excellent rates too (their headline AND their special rates). So far, the experience has been excellent and I have been really impressed with my personal relationship manager.

Short of major reform - I can't see myself going back to Kiwibank ever again. I will actively encourage friends and family away from Kiwibank. Oh and yes - I got stung with direct debit fees that they wouldn't waive.

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MurrayM

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#1810667 3-Jul-2017 08:28

I use the ASB and they used to charge for setting up direct debits but a couple of years ago they made this free.