We'd like to remind Forumites to please avoid political debate on the Forum... Read More »
We're aware that some users are experiencing technical issues which the team are working to resolve. See the Community Noticeboard for more info. Thank you for your patience.
📨 Have you signed up to the Forum's new Email Digest yet? Get a selection of trending threads sent straight to your inbox daily, weekly or monthly!
Direct Debit question please?
Options
Comments
-
YorkshireBoy wrote: »So will DDICA, to be introduced next month, help speed up DD guarantee claims for the customer?
Be nice to see "immediate" becoming just that...immediate!
No it won’t really have a direct impact on the speed of the process as far as the customer is concerned. It does however address the underlining cause of why so many banks are reluctant to process claims and try to fob customer off. This being the cost, amount of time and labour that the current system takes.
In regard to the customer receiving an immediate refund the new system will have no effect. The process for refunding to the customer and the bank claiming the indemnity are separate. Once the bank has identified that an error may have been made under the terms of the gurantee the bank must refund the money directly via its own suspense account. The bank then claims this back from the originator or failing that the sponsor’s bank through the indemnities claim procedure.
It’s unfortunate that the guarantee uses the word 'immediate' because in reality it never will be. Simply because not everybody within the bank can determine if it’s a valid claim and then be able to re-credit the account. I know from the institution with which I work that we do not process refunds in the evening or weekends, so really immediate should be replaced with one working day.0 -
-
What would be nice is to be able to approve new DD's on your internet banking, or perhaps every payment if requested. Spose we might see it in 10 years.0
-
davidgmmafan wrote: »What if there's no money to recover as in the returned payment from a company the account holder has never heard of example?
You are liable to pay the bank charges. You may be able to sue the payee concerned.
There is, as Gavin points out, a mechanism by which the bank can allegedly get their charges refunded by the payee, and then refund you.
I'd be intrigued to see how many people have actually been able to take advantage of that.0 -
By the way, er, welcome to the forum
Though it may not seem like it...!
At the risk of persisting pedantically - after all, some people have perfectly good experiences of using direct debit: I just happen to be one of the people who has experienced:
- direct debit mandates being set up on my account by payees I know nothing about (error or fraud) which did not result in funds being drawn only because I'm quite vigilant with online banking and managed to stop them;
- direct debit mandates I cancelled popping back up again on my account, with payments being attempted against them which failed, and leaving me to pay the bank charges with the bank stating "not our problem, go talk to the payee"
- direct debits being drawn twice accidentally due to "technical problems" which on one occasion left me stranded in Central London with no funds to get home - as it was at night on Friday, no way to get my "immedate refund" and without cash all weekend.Gavin,_Clear_Academy wrote: »BT have to give you the notice that they state in the Guarantee otherwise you will be entitled to a refund. "Unless otherwise agreed" allows them to alter the notice period only with your express agreement.
I dug out the actual paperwork concerned (we got rid of BT over two years ago for the final time, but I keep stuff....)
On the DD form it says:* The Direct Debit Guarantee
If there are any changes to the amount, date, or frequency of your direct debit, BT will notify you in advance of your account being debited. This will be 10 working days or as otherwise agreed.
Further up the same page:How does it work?
- You receive a bill up to 10 days before your payment leaves your bank account
Would you therefore agree that the ability of any payee to ride roughshod over the minimum notification stipulation renders direct debit a very dangerous way to pay with some payees, BT being one such example, because there is no meaningful notification period required?In the Jeremy Clarkson example the organisation should have sufficient checks in place to establish the identity of the individual. This is known as a "KYC" check or Know Your Customer
The charity receives an apparently valid mandate instruction and the name, sort code and account number all check out. How do they confirm it's genuine?if there is a fraud then the organisation has accepted the risk by using Paperless Direct Debit and so would have to refund the genuine account holder.
The bank have to refund the account holder. Or so I thought. However they do not have to refund any bounce fees - is that correct? BACS certainly think it is.If BT take the wrong amount then you can only claim back the full amount that they have taken not part of it so it would be difficult for them to site breach of contract if it was their error. I would point out that I am no expert in contract law and cannot comment on their/ your rights outside of the scheme rules.
In contract law, the supplier is obliged to supply the services, and the customer is obliged to pay for them as agreed.
Allowing a payee to "pull" the funds from you does not alter this in any way.
If the payee fails to call for the DD, it's the customer who is in breach of contract, because they failed to pay.
If the customer has a DD which has been taken refunded ("indemnified") then assuming that the customer was meant to have paid some amount, the customer is in breach of contract for exactly the same reason.If you pushed a payment to the wrong account or for the wrong amount, i.e. £100 not £10 then you have no right of recourse.
Agreed. However I'd rather be stung financially for my own silly mistake for not reading the stern warning and confirmation on the online banking screen about checking, and failing to get it right, than some third party causing me to incur charges through no fault of my own.On you last point it is a bit difficult to explain the full details of that without making it public knowledge but effectively it would arm any rogue indivduals who wanted to claim back money where there is no error with a lot of know how.
I can't define error any better than you can really but it is there to explain that you can't claim a refund just because you didn't like the service or you fell out with the company. i.e. if no error has been made under the terms of the Direct Debit rules then you would not be entitled to a refund.It is just me, or is the idea of persuading your bank that you're "entitled" to a refund - e.g. explaining your circumstances - and the fact that there are "hidden" rules when direct debit is touted as a simple, open system with clearly published rules, rather sinister?0 -
What would be nice is to be able to approve new DD's on your internet banking, or perhaps every payment if requested. Spose we might see it in 10 years.
Rather then simply pointing out the gaping flaws in the DD system as it is now, and being more constructive:
I can see why the paper based DDs were replaced in order to speed things up.
However your suggestion [approve the mandate set up via online banking] is, in my mind, the absolute minimum level of security required. Without this, or some other "confirmation that the DD is genuine", mistakes and fraud are so easy with the DD system - and which can then go on to cost the customer money - that the system is simply not viable.
That's why I have it completely disabled. At least, that's what the Bank tell me. But I do still click on the link for DD mandates and check once a week or so, just to make sure. If any ever pop up, I think a claim against the Bank for a breach of duty of care and for the cost of my time in rectifying it, is in order. Who is their ultimate customer here - me, or the mistaken payee?
Other - er, improvements:
Every mandate has a unique ID number. The customer's authorisation - above - applies to that instance of the mandate.
If the customer cancels, the process starts again. So a mandate can never be "set up" again. This part doesn't even seem to have been "designed" yet.
DD mandates are for a maximum of ONE payment in any one calendar month. Subsequent claims in the same month by the same payee against the same mandate ID are automatically refused by the bank and the customer doesn't even get to hear about it.
The customer specifies a MAXIMUM amount for any DD mandate. That's the maximum amount that can be debited on any mandate in any one calendar month in the one transaction. Should the invoice be higher, only that maximum can be claimed by the payee, and the customer must pay the difference another way.
Of course, implementing any or all of these would reduce the amount of money banks can make in charges.0 -
Greetings.
I seem to have opened a can of worms here.
Many thanks to Mark in Hampshire and all who have responded.
Petel
Personally, I think you had a few concerns, reading "between the lines" and thought you'd clarify them.
I'm not sure how well this thread is doing on that score.
However having been on the receving end of most of the flaws in the system, perhaps I'm, er, particularly interested0 -
Surely, rather than DD's being 'safe', the only 'safe' way to pay regular payments is via standing order.
That way the payer holds full control of the date, amount, and frequency of the payment rather than the payee.
The problem exists though that some companies will not accept payment via Standing Order, or refuse to give a 'Direct Debit Discount'. In which case I say goodbye to them and go elsewhere. To be honest I would rather pay slightly more for goods and services and retain control via standing order than obtain a discount to allow payees the freedom to mess about with my payments.
I have found that S/O's are relatively easy to set up once you know the account numbers and references. Companies may not like it as they may have to deal with the payments clerically, but that's tough on them!. If they want my business they accept MY payment method.
Tally0 -
Hello Mark and thanks again for your replies.
In answer to yours at post 38. As stated, this question came up in conversation at my place of work and I said that I would try to find out what the situation was with regard to what appeared to be ( and apparently at one time was ) two different types of Direct Debit.
Thanks to your own and other replies, I now think that I understand that there is now only one type ( which may or may not have a clause added ) and the use of this AUDDIS system, where seemingly unauthorized reinstatement can happen and I can pass this information on to the interested parties at my place of work.
I would wish to ask however, could anyone please tell us how this clause is worded, so that we can see if it is on any D/D agreement before we sign it and, how do we know if a company or service provider is using the AUDDIS system?
I must admit that you chaps have lost me after Marks first reply and it will take me some time to catch up. Nevertheless, many thanks to all for the input provided.
Regards, Petel0 -
Tally-Ho's response reminds me of shopping in small shops. A lot (mainly Asian ones - no I'm not being racist, it's simply a fact, go to several and several non-Asian ones if you don't believe me) charge for using a credit/debit card. Now I know there's a fee anyway (big chains generally include it in the price - which makes it unfair if you pay by cash as you don't get a discount for doing so) that the retailer has to pay, but shops have tried to charge from 50p up to close to £2 just for my using a debit card! In which case, unless I don't have much choice, I simply walk out or buy less stuff with the little cash I have in my pocket.
Same goes for shops that don't accept cards at all (unless they're otherwise really good shops - e.g. very friendly and helpful).
With the one that wanted to charge me close to £2, I simply walked to Netto, bought a cheap packet of biscuits, got cashback, and instead of returning to the shop decided to give my custom to another shop.0
This discussion has been closed.
Confirm your email address to Create Threads and Reply

Categories
- All Categories
- 350.9K Banking & Borrowing
- 253.1K Reduce Debt & Boost Income
- 453.5K Spending & Discounts
- 243.9K Work, Benefits & Business
- 598.7K Mortgages, Homes & Bills
- 176.9K Life & Family
- 257.1K Travel & Transport
- 1.5M Hobbies & Leisure
- 16.1K Discuss & Feedback
- 37.6K Read-Only Boards