Can a direct debit expire?

Iamfedup

Hi,

I just wanted to ask if anyone knows if a Direct Debit can expire?

I have an HSBC bank account and had a direct debit set up to pay the minimum balance off an old credit card. The direct debit stopped so i assumed the balance with credit card had finally been paid off and didn't really think anything else about it. 6 months later I had a letter from debt collector saying i still owed money to credit card, which i now had to pay to them. I called HSBC and they said the direct debit had expired which is why the payments to the credit card stopped.

This whole situation meant that I had a DEFAULT marked against the credit card on my credit report which has badly affected my credit rating.

This all happened back in 2008 but I want to know if a direct debit can expire and if so should it not be the banks responsibility to inform you it will expire, or is it the responsibility of the company you are paying, in this case the credit card company?

The reason I am asking this is because although this happened some time ago I have some other recent issues I want to complain to HSBC about and thought I may as well complain about this too if the direct debit expiry leading to a default on my credit report is their fault. Also I have seen online that direct debits should only expire if they are dormant..is that right? If so that would mean the direct debit I had should have never expired anyway!

Thanks in advance.

Anthorn

No they don't expire. When they are defunct the company who holds it is supposed to remove it but they don't always do that. I only just deleted a bunch of them which had been dormant for 3 years! Then I received a letter from one of the companies, a share dealing service, that it was a condition of membership that there is a direct debit. They had not cancelled my membership when I requested cancellation.

Probably best to keep a check on them. Easy with online banking. But be aware that when you delete them your bank is likely to inform the payees that their direct debit has been removed.

Lokolo

I thought DDs expire 13 months after the last payment?

alanq

I have not heard of a DD expiring while active.

Are you sure that HSBC didn't inform you? You obviously weren't reading your credit card statements so how can you be sure that would not have ignored a letter from your bank?

Iamfedup

thanks for your replies,

HSBC definitely did not inform me of its expiry. As far as I can recall i forgot to change my address with cc company so wasnt reciving cc statements. I know that is my fault, i used to be a lot more irresponsible with stuff like that than i am now

alanq

According to this article, also relating to HSBC, it was the responsibility of the credit card company to ensure that an active direct debit remained in place. (Not quite identical situation as in this case DD had been dormant for a number of months).
http://www.telegraph.co.uk/finance/personalfinance/2804961/Letters-to-Liz.html

Anthorn

Lokolo wrote: »

I thought DDs expire 13 months after the last payment?

Yes, there is a dormancy period which starts after 13 months and the bank is supposed to remove it. But clearly not all banks do that! Could be that it's not a requirement. But there is no expiry date on a direct debit which will be automatically activated.

http://www.thesmartwaytopay.co.uk/DirectDebitExplained/FAQs/Pages/InactiveDirectDebits.aspx

bubieyehyeh

I was told it was a FSA requirement for banks to delete direct debit unused for 13 months. I was told the receipent of the DD would be informed of the deletion, and were supposed to re-set it up if it was still needed. So the receipent is too blame if a payment is missed due to auto-deletion of a direct debit.

I found out that Nationwide Credit Card don't re-setup auto-cancelled direct debits, and their systems still think it is in place. I'm sure they are not the only ones.

Gromitt

Nationwide told me that a Direct debit to a credit card will automatically expire and be disabled after *3 months* if it wasn't actively used. I got stung for a £12 charge because of this (had DD setup and for the pass 3 months always paid the statement in full before the statement was produced). After raising a complaint I got the charge refunded, and then they did it again and I got that one refunded too, then I closed the account.

JuicyJesus

My query is why the Direct Debit suddenly stopped being taken (this doesn't happen - Direct Debits do expire, but only after they haven't been taken for a while, they don't just get cancelled out of the blue after regular payments each month), why you didn't notice this and also why you didn't notice the credit card statements informing you you hadn't paid and would be charged £12 a pop.

agrinnall

I agree with JuicyJesus that the OP's issue is with the credit card company, not HSBC (unless they are the same, although that doesn't seem very likely in this case). They need to explain why they stopped trying to take payments via the DD, I can't think of a good reason why they would do this so unless they can prove that it wasn't their fault they should remove the default and take the debt back from the debt collectors - the OP will still owe whatever the balance was when they stopped taking payments, but I would argue that no interest should be applied between than and now.