Repayments - warning for direct debit users

Inverness

I work for an advice agency. Be aware that, where you use a direct debit, some lenders unilaterally increase your payments and your bank will have to honour them. This can obviously throw out all your careful priority budgeting.

If possible, use a Standing Order where you control the amount the bank can pay out for you each week/month.

Broken_hearted

Seconded and don't take the standard crap they give you about not being able to accept SO because if its that or nothing they will take it.

simongregson

They must give you notice of the increased payments, if they don't, you can reclaim the payment via the direct debit guarantee from your bank, who must give a full and immediate refund. They will then reclaim the money from the company.

If you are in arrears on payments, a standing order is probably still the best bet to avoid the hassle of reclaiming the money.

mummytofour

I hate DD and only have a few now, not even my mortgage is DD!

Ames

simongregson wrote: »

They must give you notice of the increased payments, if they don't, you can reclaim the payment via the direct debit guarantee from your bank, who must give a full and immediate refund. They will then reclaim the money from the company.

If you are in arrears on payments, a standing order is probably still the best bet to avoid the hassle of reclaiming the money.

Is that really true? I tried to cancel a dd last year but my bank messed up and didn't cancel it so it went out, taking me overdrawn. I was told when I tried to cancel that if it didn't work they'd refund the amount taken, but when I went in to sort that out they told me it was rubbish and they didn't have to give me it back.

simongregson

Ames wrote: »

Is that really true? I tried to cancel a dd last year but my bank messed up and didn't cancel it so it went out, taking me overdrawn. I was told when I tried to cancel that if it didn't work they'd refund the amount taken, but when I went in to sort that out they told me it was rubbish and they didn't have to give me it back.

Yes, they must refund the money. They cannot allow payments once you have canceled. See below:

Note it is your bank who must make the refund, so you do not have to wait for them to investigate it with the company concerned.

The Direct Debit Guarantee (from bacs.co.uk)

• If the amounts to be paid or the payment dates change, the organisation collecting the payment will notify you normally 10 working days in advance of your account being debited or as otherwise agreed
• If an error is made by the organisation or your bank or building society, you are guaranteed a full and immediate refund from your branch of the amount paid
• You can cancel a Direct Debit at any time by contacting your bank or building society. We also recommend you notify the organisation concerned.

Ames

I wish I'd known that last year when they did it, they just said that Barclaycard must have thought they had the right to take the money and so they wouldn't refund it and I should take it up with BC.

Inverness

In practice the banks are saying a direct debit is as good as a cash instruction. Use standing order if possible.

simongregson

However, any complaint you make will be upheld, there are several examples on the financial ombudsman service. Waving the direct debit guarantee in front of them will get the desired result.

However, like I said, if you are in arrears on an account, it makes sense to cancel the direct debits and make alternative arrangements in order to minimise hassle.

haggisAThome

love your name .. and the place :beer: only 16 miles down the road as well :T