Direct debit on a Halifax account

[Andyrory]

My Niece has just been to get a new phone on an O2 contract. She filled in all the paperwork with the assistant, then the assistant went off to do her credit checks etc etc. when she came back she told my niece that if she wanted to set up a direct debit on her Halifax bank account she would have to pay £300 upfront and then have 3 payments go out of said account to prove she was trustworthy. After these 3 payments she would get her £300 back.
Does anybody know if this is standard procedure? It sounds a bit strange to me. My Niece is 20 years old and has had her Halifax account for over 3 years and she was in an O2 shop so i would imagine they know what there talking about.
They also told her not to try another shop as 2 credit checks in 1 day sets alarm bells ringing.
Any help or advice would be greatly appreciated

[cathfromsaron]

i had a penny taken to ensure that my account was active!

do you think it was £3.00?

cath x

[Andyrory]

yeah i've had a pound taken off credit cards, but she assures me it was £300.

[CheekyChops]

That sounds like a condition laid down by O2 rather than the Halifax, I don't think it would make any difference what bank your neice held her account with. Has she had any credit before? If so, is she up to date with payments?

I recently set up a credit account with British Gas and have had to pay a ddeposit of £250 which I get back after a year, as long as I am up to date with my gas/electric bills.

[Andyrory]

Hmmm yeah, thats what i was thinking Cheeky. She's never had a direct debit on this account before so therefore has certainly never missed a payment.

[Andyrory]

Just spoke to my Niece again and it does sound like this is a condition that is being set by O2 and not the Halifax. Is this a common ocurence when setting up direct debits? Can they ask you to pay a set fee upront as a sort of security? I always thought a bank would honour a direct debit even if it meant you going overdrawn.

[maclarencat]

I am really glad you asked this question because it reminded me that when my husband got his phone from O2 at the end of November he had to pay £100 deposit which they said he would get back after 3 months. I had completely forgotten. I must keep my eye on it to make sure it comes back at the end of January.

[themas]

This will be a security deposit - a condition laid down by O2, & nothing to do with Halifax. Banks do not have to honour direct debits unless they are still active & there is sufficient money in the account. The account holder can cancel the direct debit at any time. If someone does that the company owed the money doesn't get it

[Andyrory]

Is this just an O2 thing then or does anyone know of it happening with any other networks?

[maclarencat]

I have just spoken to O2 and although they say they will return the deposit after 3 months they dont actually dio it until the 4th bill is raised then it is not refunded but put as a credit on your accunt and if you want a refund you have to ring up and ask for it!