Direct Debit Indemnity

lannyloo

Hiya all,

Does anyone know anything about this or had any experience of it?

Im having loads of problems with my bank, theyve allowed payment to be taken for a DD i cancelled, and now because ive been charged my account is overdrawn and 3 further DDs have failed so ive been charged for these too. Im in the process of trying to open an account with another bank, and then i will be reclaiming charges.

I heard about this Direct Debit Indemnity, but not sure what it is, or how i go about sorting it

oldwiring

I think you are meaning the Direct Debit Guarantee, which is explained here

In contrast, the variable nature of direct debits means that beneficiaries can claim different amounts at different times. This flexibility is the main advantage of the direct debit system – but there is a potential risk that unscrupulous or inefficient beneficiaries might claim money that is not due to them.

To combat this – and to reassure customers – the direct debit system contains two main safeguards:
# The direct debit guarantee provides for the customer’s bank to refund disputed payments without question, pending further investigation. (For fuller information about the direct debit guarantee, see the April 2003 edition of ombudsman news).
# Direct debits can only be set up for payments to beneficiaries that are approved ‘originators’ of direct debits. In order to be approved, these beneficiaries are subjected to careful vetting procedures – and, once approved, they are required to give indemnity guarantees through their banks.

Usually, the customer has to sign a direct debit form, although some particularly trusted originators are authorised to set up direct debits where the customer has given authority over the phone. If that sounds a little risky, remember that the originator must have obtained the bank account details from the customer – and that the customer is protected by the direct debit guarantee.

. This was taken from

http://www.financial-ombudsman.org.uk/publications/ombudsman-news/38/standing-orders-direct-debits-38.htm

Therefore if the payments are not due, you should instrcut your bank to credit your account and calim reimbursement from the originator. If the debit was not due your account should not have been debited and thus the charges you have sufered are likewise bot due and should be refunded.

lannyloo

Thanks for that oldwiring. Im having major problems trying to sort this out with my Bank. The member of staff all but called me a liar, saying i hadnt cancelled it.

Im now looking for another bank to open an account with and then letting rip at natwest (after ive claimed back charges of course) :beer:

Mikeyorks

lannyloo wrote:

.... saying i hadnt cancelled it.

Out of interest - how did you cancel it? :-

http://www.bacs.co.uk/BPSL/directdebit/generalpublic/usingdirectdebit/Cancelling_DD/DD_cancelling.htm

.. as I always find it odd that 2 errors are alleged to be made in this sort of case. The first by the initiating organisation .. still requesting the money after you have advised them otherwise. And the 2nd error by the Bank in accepting the charge .. despite you have countermanded the mandate with them?

Jay-Jay_4

You're right with the word 'Indemnity'.

The Direct Debit Guarantee is the promise made to you, the customer. The indemnity is the paperwork the bank used to claim back funds and charges from the Direct Debit Originator (the company you were paying).

You say

theyve allowed payment to be taken for a DD i cancelled

The bank does not 'allow' direct debits to be claimed, they are claimed automatically. If you have cancelled with the originator either too late for the payment to be stopped or if the originator has failed to action the cancellation then the problem is NOT with your bank. Despite this, in this case your are entitled to a refund under the DDG scheme and your bank can raise an indemnity.

If you cancelled with the bank and not the originator then it IS the banks fault BUT if they have no record of your phone call, no written confirmation and nothing recorded on their computer then there is no proof that you cancelled. In this case your bank will not be able to issue an indemnity, they can issue a refund request but if you owed the Originator that money anyway and you have no proof that you attempted to cancel then it's very unlikely that you will get any money back.

Tell us the full story and we can give you advice. When did you cancel and who did you cancel with?

lannyloo

Ok, on the 1st December 06, i wrote to the company the DD was for...future publishing ltd, i also wrote to natwest. Then forgot all bout it.

on the 4th Jan 07, future publishing tried to claim the money. Obviously, as i had cancelled the DD, there was no money neeed in the account. On 4th Jan at dinner, i paid in money for a DD that was coming out on the 5th Jan. On Sat mornin i logged on to my account online. Doing this, i saw that future publishing had tried to claim, so my account was charged 38 pounds. The money i had paid in on thurs dinner, was immediately taken off the overdrawn limit.

And, because of this, the DDs on 5th Jan, which i wanted to pay, was unpaid so i was charged a further 38 pounds.

The woman in the natwest practically called me a liar. My reply to her was, why on earth would i want to be charged 38 pounds when the DD was only for 6. She then asked me for the original copy of both cancellations. How i was meant to have the originals, when id posted them, ill never know. I have now written to future publishing and asked them to refund all charges incurred because of their error. But im slightly scared, that no one will reimburse me and il be out of pocket.

Mikeyorks

lannyloo wrote:

She then asked me for the original copy of both cancellations. How i was meant to have the originals, when id posted them, ill never know.

If you run your account so close to the wire - it's advisable to retain some proof of transactions such as this. Particularly where you clearly don't have online access - whereby you could have cancelled the DD on the Bank system yourself.

The DD guarantee operates 'where an error has been made'. In this case you will have a problem proving that - as it appears neither the Bank nor your creditor are admitting to having had the letters.

In the circumstances your approach to 'future publishing' (provided you are not in debt to them .. and this was a month by month 'service' you were cancelling) appears to offer the best hope of recovering your money. Unless you are prepared to reclaim all charges from your Bank i.d.c.

lannyloo

as far as i was concerned, the DD was cancelled. Thats why there wasnt enough money in my account. Yes, i admit, i should ave chased it up, but i hve cancelled DDs in the past, and had never encountered any problems.

Jay-Jay_4

Also, you say that you paid money into your account on 4th Jan for a DD that was due out on the 5th. You need to look at your t&cs and make sure that the bank will allow this as it's cutting it a bit fine with processing. Usually you have to have the money available the day before so that the DD can debit at 12.01am. If the money you paid in wasn't processed instantly then it wouldn't show on the account until after the DD had already been returned unpaid.

I feel your best course of action was to go into a branch and insist that you had written to them and the originator to cancel, perhaps taking along copies providing that you typed them on the PC. If you could then convince the bank to do an indemnity you can pretty much be sure that you will get your charges back as they can reverse them. Getting the company to pay out is going to be much harder but alas you've already written to them.

TBH, I'm not sure you did write the letters to cancel :whistle: and the bank staff really have heard it a million times before so you may get a few inquisitive looks because it's very convienient for two letters to go missing when you're looking at a pile of charges. Sorry but that's my honest opinion Next time send a letter and make a phone call to confirm with the originator and then cancel it online yourself.

lannyloo

Thanks for that, i came on this site for help and now youve called me a liar too. I wont bother any of you again.

lannyloo

Oh and Natwest say money has to be paid in by 3pm the previous day, which i had done.