Cancelled direct debit

DCodd

Companies can not re-instate a D/D without your approval, absolutely no way! The D/D is an instruction to your BANK to allow a payment to be drawn on your behalf from your account and if you cancel it they will not allow payment to be processed without another D/D mandate being setup by YOU!

dunstonh

Most likely action here is that as they were only cancelled at the weekend and processed on Monday, it was too late for the companies in question to stop the request. The Natwest system will pick up that they are cancelled and they will be returned and you should see a contra entry appear (probably overnight).

olly300

jambosans wrote: »

They can, the agreement to pay is with the company, not with the bank. So if you cancel a direct debit with the bank and do not inform the company in some cases (not all mind) the company will setup a new payment.

I've dealt with two other high street banks (not NatWest) that allow you to cancel direct debits right up until the day before, but as I have said, this does not always prevent a payment from leaving. For larger companies their direct debit system may be automated, so it can re-issue a mandate to an account to take what you have agreed to pay on that date.

NatWest may operate differently but you should always inform the company that you have cancelled with the bank.

Companies may do this but the bank doesn't have a right to pay a direct debit a customer has cancelled except in specific circumstances.

This has gone to the financial ombudsman service and they have ruled that as the bank is an intermediary, if a customer cancels a direct debit they must not pay it out in normal circumstances - http://www.financial-ombudsman.org.uk/publications/ombudsman-news/27/27-directdebit-guarantee.htm (Read the case of Mrs B for normal circumstances and the case of Mr F for an exception.)

However using a little common sense if a company then sets up a direct debit again the bank has no way of knowing whether the customer requested that the direct debit be set up again.

In my experience with 3 different banks if a company does this and you give instructions to the bank in writing that that:
1. The direct debit has been wrongly paid out
2. You have not requested the direct debit to set up to be paid to the company
The bank will refund you and will not allow the company to set up yet another direct debit on your account.

Some companies i.e Tiscali have a habit of ignoring customer written requests to cancel direct debits, take a long time to deal with letters and are near impossible to contact on the phone so the only way of cancelling a direct debit is by doing so with your bank and preventing them taking any money out.

olly300

DCodd wrote: »

Companies can not re-instate a D/D without your approval, absolutely no way! The D/D is an instruction to your BANK to allow a payment to be drawn on your behalf from your account and if you cancel it they will not allow payment to be processed without another D/D mandate being setup by YOU!

Unfortunately they can. (I can't remember what the system is called.)

However if they do simply inform your bank that you didn't not set the direct debit up and want the money refunded asap. Unfortunately lots of bank staff have a habit of lying to customers over the Direct Debit terms in person or over the phone, so the best way of dealing with this is in writing.

jambosans

The point I am simply trying to make is that in some cases a customer may be contractually bound with the company that takes the direct debit. So therefore canceling the direct debit with the bank may not be sufficient to insure no further payments are taken. If you have not informed the company involved they may setup a new mandate. Some people claim that this cannot be done without your "permission" but if a person is contractually obliged to make that payment then they have given permission when signing the contract.

I am not disputing the fact that direct debits cannot be setup without a customer's permission and I acknowledge they are protected under the Direct Debit Guarantee. Fill out a Direct Debit Indemnity Form if you feel a company is in breach of the DD Guarantee but ultimately if you have not informed a company (that feels payment is due) then further mandates will not be stopped by the bank. For all the bank knows you have contacted the company to reinstate the payment.

On the BACS website it states that first point of contact should be the bank, but also states it is worth contacting the company.

Key words to remember is that "may" and "possibly" have been stated in my previous posts, but it definitely can happen, from then you would claim under the Guarantee. Like I said though, if you owe that company money contractually, and the bank refunds it under the Guarantee, you will still have to pay one way or another.

continualdiamond

Hi all, well i thought i had it all worked out as phoned natwest and they said i wouldn't incur any charges as obviously i had the funds available and then by comfirming who i was and all that they re activated the direct debits, i checked online banking right away and the staus did change back to active.

But then checked online banking today after work and they've been refunded back into my bank account.