lundi, février 07, 2011

a few tips on French banking...

In the last couple of days I have read a few experiences on other people's blogs in regards to French banking and specifically direct debits.
My most recent job gave me a lot of insight into the way things work. I won't go into too much detail simply because the only words to describe things would bring my blog straight up in a Google search with those keywords and I would prefer to avoid that at the moment..
Anyway just a quick word of advice re French direct debits and bill paying.
For those of you who do not know there are several ways to pay a French bill:
1. cheque - FYI it is illegal in France to post date a cheque and if there is a discrepancy between the letters and numbers the spelled out amount always takes precedent.
2. TIP (the tear off bit at the bottom your bill can be sent in along with a cheque so the company has your reference number. Alternativly it can be signed, dated and returned to the company with a copy of your RIB details allowing the company to take a 1-off direct debit for the amount on the TIP.)
3. Direct debit - prélevement automatique. This is the most common means of payment and the most traditional way to set one up is to provide the company with a copy of your RIB details requesting a direct debit be set up on your account by the company. By doing so you authorize the company to call for the funds each month and the bank releases the funds accordingly. This can also be set up on your debit card but for the following reasons this is to be avoided at all costs!
The direct debit system works great - until you have a problem! You authorize the payment to leave and each month it does so. You do need to make sure there are sufficiant funds in the account to cover direct debits as your authorization permits them to take any amount which can put your account overdrawn and rack up fees. The reason being is that you have authorized the company to collect the funds and they do so as they see fit. Again, most of the time this works out fine, the company calls for the given amount each month and you do not need to do anything, no bills or cheques to deal with.
The problem occurs when you have a problem with the company. The bank does not pay out unless the company calls for the funds. When set up with RIB details the bank is able to put a block on the direct debit if need be - faire opposition de prélevement - which simply blocks the company from accessing your account. This does not cancel services or contracts you hold with the company and it is the only thing the bank can do to stop any outgoing direct debits. There used to be a charge for doing so but I think a law was passed to prevent banks from charging you. If you have problems with a company not respecting a contract you have with them and direct debiting your account for the wrong amounts or after a contract has been cancelled the first step is to send a registered letter and the second step is to ask your bank to put a block on the direct debit. In the meantime nothing prevents you from paying the company by cheque/cash etc until things are sorted. If a disagreement is settled and you want the direct debit to continue you need to ask your bank to lift the stop - demander une main levée de prélevement.
It is important to know that while you can have several contracts with a single company (2 different cell phones, internet vs. landline, different taxes set up for the tax office, 2 homes both through EDF etc...) if you put a stop on the direct debit the bank cannot differentiate the contracts you may have with a company and will stop all direct debits to that company (this includes TIP payments as they fall under the direct debit catagory even if they are not ongoing).
**However if the direct debit is set up on your card there is nothing the bank can do. Even if you stop your card, block it, lose it, declare it stolen and it is officially cancelled by the bank the company can still have an ongoing direct debit on the card that will continue to debit your account.
If a direct debit has already gone through your account there is a small window (usually 2-3 business days) that your bank has to pull back the direct debit. This will be done automatically due to insufficiant funds in your account but can also be done at your request (written or in person) but you will likely incur bank charges for the privilage. If your account is overdrawn the direct debit will eventually be rejected and recredited to your account. In this case the company will obviously notice that they have not been paid and will try to represent in a few weeks time, again incurring you with more bank charges. This will not make you interdit bancaire.
Interdit bancaire is only if you bounce a cheque. The reason being is that that cheque is a debt you owe the person you wrote it to (think an IOU). Until that debt is paid and officially confirmed to the bank you will be blacklisted for all of your French accounts at your bank or any other accounts you hold at other French banks (via the Banque de France) for up to five years. Again, this is only due to a bounced cheque, going overdrawn by other means (debit card payments, direct debits etc) have no effect other than racking up charges (FYI if you go to the main page of your bank's website I can pretty much guarantee that all of their charges will be listed in a pdf document under "tarifs principals" or "frais bancaires / nos tarifs" etc).
I hope this little "tutorial" wasn't too confusing or long but I thought it might help some newbies out there or even some of us that have been around for a while! :-)
ps. I hope there are not too many spelling mistakes, always a shortcoming of mine and spellcheck via blogger is on the blink...

10 commentaires:

la fille en rose a dit…

scary. i've never had any problems with my prélèvements, but now am wondering if i shouldn't be proactive and change to paying my cheque. any advice for how to make the switch as painlessly as possible?

MilkJam a dit…

I wouldn't recommend changing anything - if it ain't broke don't fix it!

The reason being is that you have to get THEM to change and contacting them at this point isn't worth it unless you have a problem. Plus the direct debit does have its advantages - if your bill is lost in the mail / your on vacation for a month etc you won't have hassles with the company for unpaid or late bills.

Again, it's not to scare people from direct debits (i've probably got 5 or 6 on my account) but to know where you stand, how the system works and what you can do if you have a problem!

kiwi in france a dit…

Thanks for the interesting and helpful information! I've not had any problems (touch wood). I've taken to paying most things by cheque now, which seems a lot easier than dealing with the companies and my bank!

Next I think you should get a job in SFR... they are the most difficult people to deal with!

la fille en rose a dit…

but you scared me with your bold-faced AVOID AT ALL COSTS!!!

MilkJam a dit…

yeah, avoid direct debits set up on your debit card!!!! Using your RIB details is fine!

la fille en rose a dit…

okay. i don't think i knew there was a difference. still not sure i get it, but the fact is i have way too much other crap going on to deal with changing anything right now. maybe i'll look into it all this summer. thanks :)

MilkJam a dit…

setting up a direct debit on your debit card is done by giving your card details to the company.

setting up a direct debit on your account is done by giving your RIB details to the company.

See the difference?

PigletinFrance a dit…

Hi there! Thank's for stopping over at mine and for commenting and also for this insightful post! Very useful!

I'd never had any problems before this one with EDF but my eyes are now WIDE open!

la fille en rose a dit…

yup, thanks. and i'm not even blonde! :)

Megan a dit…

Interesting. I didn't know postdating a check was illegal. I thought it just meant that it started the one-year period to collect on the funds, but they can deposit the check as soon as they receive it.