Direct Debit System Totally Flawed - Any Advice Please

Dydie

I took out a normal one year insurance policy - shortly before it was due to expire they wrote to me with my renewal quotation - I shopped around on comparison sites and found much cheaper insurance elsewhere and telephoned my current insurer to ask if they would price match - they said no so I said thank you very much I will not be renewing with you can you send me the no claims proof please.

I have received the proof of no claims as requested and not heard anymore from them until the DD - Now as your average Joe I admit I have not read through T&C's concerning renewal but surely if you take out a one year policy and that year has ended then you have no further contract with the company?

I have not had a new insurance certificate or anything from the company and have taken out insurance with someone else, which in my book suggests they should not be requesting a new DD.

In any case the problem here seems to be this system whereby my Bank is accepting DD mandates without any security checks or authorisation.

I already do have internet banking/telephone banking and text alerts but none of these systems warn you that you have a new DD they only start informing you of the payment date once the first payment has been made, because funds are limited I am checking my account pretty much on a daily basis and the first I knew about this was when it left my account.

Surely a simple way to check authority is a simple message that pops up when you log on that tells you a new DD request has been received and a tick box for you to confirm you accept it? I Understand Natwest received the instruction at least 10 days before the money left my account so plenty of time for me to have sorted this out before it left my account and caused me stress

System

Part of the Direct Debit rules includes an in-built delay before a payment can be taken via a new D/D instruction. This delay is designed to allow the merchant to inform the customer of the details of the D/D - (Date, amount, reference) so that the customer knows what is due to come out of their account.

So, if the merchant has sent your bank a new electronic direct debit instruction (where no signature is required) then that merchant must have sent you a notice with the D/D details - normally 10 days before the first payment is due.

If you ignore the notice (insurance renewal) then they may assume that you have agreed with it and hence simply go ahead, setup the policy and debit your account.

However, if the merchant has not sent you this notice (letter, email, text, or whatever format you have previously agreed to) then they have broken the rules and can be reported, if they are a regular offender, they can have their Direct Debit authorisation removed (but only in extreme cases)

JohalaReewi

Twister84 wrote: »

You should start using online banking - excellent tool for monitoring Direct Debits at your fingertips!

Unless you are with First Direct where new direct debits don't show online until after the first payment has been taken.

Twister84

JohalaReewi wrote: »

Unless you are with First Direct where new direct debits don't show online until after the first payment has been taken.

That is the case with Natwest & RBS aswell - new Direct Debit instructions can only be viewed in branch.

They only show up online after the first payment has been taken.

But my point was, that the OP could have checked online and spotted it earlier, or even cancelled it themselves online.

pmduk

Unfortunately, despite how banks try to sell it to us, direct debits are not for the consumer' benefit.

JuicyJesus

pmduk wrote: »

Unfortunately, despite how banks try to sell it to us, direct debits are not for the consumer' benefit.

I find them to my benefit. I save money by paying many of my bills that way, and they save me the hassle of setting up and/or amending standing orders, sending around cheques or making manual bank transfers. I have never had a single mistake made with any of my DD payments, ever.

But then I pay attention to my accounts, read my bills when they arrive and make sure I have enough money available in my account to cover them when due.

I would suggest that the OP's problem is a contractual one. If their contract with the company obliges them to pay by DD then they could theoretically keep setting up DDs and claiming money. NatWest should also be able to put a "caution" on the account to prevent DDs from being set up automatically. Quite why they have not done so is beyond me.

samwsmith1

JohalaReewi wrote: »

Unless you are with First Direct where new direct debits don't show online until after the first payment has been taken.

I've got several direct debits showing up on my First Direct account which are yet to be taken.

JohalaReewi

samwsmith1 wrote: »

I've got several direct debits showing up on my First Direct account which are yet to be taken.

That's interesting because they don't do that on mine. When I queried this with customer services (who could see them) they said this was how the online system worked.

pqrdef

Reinstatements aren't the only problem with DDs. Surprisingly many people manage to misquote their account details. Then the merchant sets up the DD on the wrong account, and takes money, and the victim knows nothing about it until he may be in all sorts of trouble.

Of course the merchant sends notifications to the customer, but the merchant has no way of knowing whether the customer is the account holder, and no way of contacting the account holder as such. And it's the account holder who needs to be notified. Obviously, notifications should go via the bank. Guess who doesn't like that idea.

Then there was the Jeremy Clarkson case. Clarkson insisted that somebody in possession of your sort code and account number couldn't steal money from your account. He gave out his own details. Somebody used them to set up a regular donation to a charity by DD. And of course there's no trail at all back to the perpetrator.

tagq2

If only there were some sort of electronic communications medium by which we could interact quickly with our bank. We could be notified of and Confirm/Deny a new DD or a DD change outside certain parameters, all before the standard 10 day notification period is up.

I've used Natwest online banking since it was provided as software on a 3.5" floppy and required you to dial a dedicated number. Over the past decade there have been so many missed opportunities to take advantage of the Internet to give an excellent customer experience.