Fraudulent Direct Debit - have been paying someone else's bills!

crazyguy

Mark_In_Hampshire wrote: »

This also comes up in this thread:

http://forums.moneysavingexpert.com/showpost.php?p=29467691&postcount=9

I had a quick look but I can't find my exchange with BACS. It will be somewhere in an old Outlook PST file. They began being helpful up to the point where they had to agree the insecurity and gaps in the system in order to respond to the specific questions I was asking, and more or less told me to shove off when I pushed the matter.

It has always been the case that the customer may file an indemnity claim with the bank and have the bank do the running after the payee to recover the charges but it isn't something the Bank cares to mention. Had I known that at the time I'd have gone down that route.

My experiences with DD are maybe worse than many, so I just don't use it, although annoyingly, even though I don't use it, that doesn't stop me falling victim to these mistakes and fraud.

The banks are pretty useless when it comes to dd fraud and you have to keep on there backs to get it resolved, they hid the consequential loss form from me even after I had found out about it they still chose to say they knew nothing of this, I emailed the Director of the bank with a full and frank letter explaining my situation and stating that unless they seek to rectify my issue with themselves I would inititiate a Small Court Claim against them and within a few hours of my email I had a phone call saying this will be dealt with in the end they aggreed a £250.00 gesture of goodwill for all the problems I had received from them.

Mark_In_Hampshire

Isn't it amazing how their position changes when it becomes evident that the customer has done the research

crazyguy

Mark_In_Hampshire wrote: »

Isn't it amazing how their position changes when it becomes evident that the customer has done the research

I know it is quite frustrating at times.

Cissi

crazyguy wrote: »

Wrong it is a dd and therefore the onus falls back to the bank you should name and shame both of them here and you can also claim back any additional cost's incurred from resolving this from calls to postage cost's.

It was an fraudulent dd and the bank are your first port of call.

As I said above, I've already been in touch with the Financial Ombudsman, who unfortunately confirm that the DD guarantee doesn't apply in this case, as the DD mandate had not been authorised. Seems crazy, but there you have it - doesn't look like the bank is liable.

crazyguy

Cissi wrote: »

As I said above, I've already been in touch with the Financial Ombudsman, who unfortunately confirm that the DD guarantee doesn't apply in this case, as the DD mandate had not been authorised. Seems crazy, but there you have it - doesn't look like the bank is liable.

That is absoloute rubbish as in my case the DD was neither authorised nor done with my prior knowledge which seems the same case for you here, it is simply the FOS & the Bank passing the buck as they are quite frankly lazy and incompetent I had to take the actual Company whom set up the dd on my account to a Small Claims Court, I did win.

If I were you I would write a letter to the Company concerned and advise them that you are looking a full and final resolution against this matter within 7-14 working days and if they fail to cover all your cost's to date from this matter then you shall seek to organise a Small Court Claim Against them.

There is a lot of stuff to list here about the correct rules under the DD user guide so in brief the points you should make to the Company that can win a legal challange are as follows.

A Company wishing to join and use the Scheme must adhere to the rules outlined in the Direct Debit Service User Guide, section 1.3

1.5 The advance notice

This is the method by which service users give notice to the payer before the first Direct Debit is
collected. It must also be given if the due date, frequency or amount changes.
The service user may agree the period of advance notice with the payer. The default period in
the absence of any other agreements is a minimum of 10 working days plus postal time. As
such the time period used in the Direct Debit Guarantee is the time allowed between the payer

receiving the advance notice and the first / amended collection.


This part applies more so to your bank.

1.10 Indemnity claims

Paying banks will refund the payer in the event of an error. If the error is made by the service
user, paying banks will use the indemnity claim process to reclaim the refund from the service
user.
All indemnity claims must be settled within 14 working days of the date of the claim. An
automated process for the submission of and settlement of indemnity claims was introduced in
October 2010 and all banks must migrate to this automated process by 30 April 2011. During
this migration window service users may receive indemnity claims in paper form or via the new
automated process. See section 11 for further details.
The service user may in certain circumstances raise a counter claim. Refer to section 11.2
‘Valid counter claims’.
Where the paying bank has made a payment in error, it may send a refund request form to the

service user. The service user may settle this at its discretion.

2.4 The indemnity

As a condition of participation in the Direct Debit Scheme, a service user must execute a
standard form of indemnity which must be obtained from its sponsor. By executing the
indemnity the service user is bound by the terms and conditions of the indemnity. Refer to
section 2.7 ‘Example of standard indemnity’ and section 2.8 ‘Example of standard indemnity
(partnership)’.
The purpose of the indemnity is to underwrite the protection offered to the payer under the
Guarantee.
Service users should note that the liability is unlimited as to;
a) Time - the liability will continue in respect of Direct Debits originated prior to receipt by the
banks of written notice of termination of the indemnity.
b) Amount - the liability of a service user arises in respect of Direct Debits originated in error.
Also where a service user has failed to collect, consequential losses attributable to such errors
may also arise (e.g. failure to collect an insurance premium can result in loss of cover). Refer to

section 11.7 ‘Consequential loss’.


Again this part applies too the Bank,

11 Indemnity claims

Introduction

Paying banks will refund the payer in the event of an error by the service user. Paying banks
use the indemnity claim process to recover the refunded payment from the service user.
The service user must settle an indemnity claim within 14 working days of the date of the
claim. The service user has the right to make a counter claim under certain conditions as

detailed later in the guide.

11.7 Consequential loss

Where the payer claims consequential loss as a result of an erroneous Direct Debit payment the
paying bank will claim this from the service user on a separate indemnity claim form.

Consequential loss must be fully justified by the payer and this justification attached to the

Can be phone calls, bank charges, postage and anything else that relates to the issue caused by the erroneous DD.

In my claim I put everything down from printer inks & paper to my actual phone bill with all the call cost's to the Company and bank to resolve the issue.

Buzby

As I recall, a Mr Clarkson said that he was secure and published his Sort Code and A/c number in an article as a challenge to fraudsters. Of course, money was taken from his account, AND as he had not entered into any arrangement with the firms that took the money - a Small Claims action (for the funds return) would be wholly inappropriate. Indeed, any SC action would be an action for money, and sadly has no other benefit and does not prevent the same thing happening again.

Similarly, the police will not accept this as fraud, preferring to let the Banks sort it within themselves, so if they do not agree with the complainant, the complaint will fall, leaving the customer to sue his own bank for the return of the funds.

DD's remain bad news, and with the so-called guarantee not covering for consequential loss, anyone who accepts that DD's are an acceptable process to their financial affairs management, will eventually come a cropper. I have ensured that my bank account has DD's disabled, and this has given me a little bit of confidence, but I am no way complacent this will not alter, and needs constant monitoring.

That's the REAL scandal.