Going to pay that debt you had outstanding? If you want to be sure that your money reaches its destination, here is some advice

25/02/2019

It’s happened to many of us. You miss a mortgage instalment and now have to pay the past-due debt. Apart from any interest or fees which you may have been charged, you could come up against another problem, particularly when you have various debts derived from different products with the same bank: how can you be sure the bank knows that the payment you are going to make is to settle, say, your mortgage debt and not some other debt?

First, look carefully to see if your contract says anything about how you should proceed. If it is silent on this point, here is some advice covering the most common situations you may encounter:

• If you are going to make your payment at a bank counter, you should inform the employee attending to you of the purpose for which you are making the payment. We recommend that you state it in writing, in the field “observations/purpose” of the deposit form, or in a separate document. This will serve as a record accrediting the purpose of the funds deposited, in the event the bank fails to take it into account.

• If you prefer to pay by transfer, keep in mind that the indications you include in the field “purpose” will not be taken into account by the bank, since they are observations solely addressed to the beneficiary of the transfer. Your bank will merely make the transfer to the indicated account automatically, without taking any notice of the observation included by you. Therefore, in these cases, for greater certainty, you should attach to the transfer an explanation addressed to the bank, in which you indicate its purpose, so that there is a clear record of your intention.

• Finally, you can make the deposit at an ATM, which allows you to state in the field “purpose” what the funds are to be used for. Here two cases should be distinguished: (i) the ATM itself has a mechanism to check the amount of cash paid in or (ii) the amount paid in is counted manually by bank employees.

  In the first case, since the process is automated, it is not normally to be expected that the bank will take into account the purpose of the funds, as is also the case with transfers. By contrast, in the second case, since bank employees are involved, the situation is similar to that mentioned above where the funds are paid in at a bank counter.

To sum up, in case of doubt, to prevent any misunderstanding and ensure your peace of mind, inform your bank in writing of the purpose for which the funds are to be used. That way you shouldn’t have any problems.