Direct Debit Guarantee in case of dispute

System

Hazzanet wrote: »

NB – The counter claim is not the only route open to the service user. The service user retains its right to take action directly against the payer. Direct Debit is the method of collecting payments and the banks are not responsible for any underlying contract between the service user and the payer.

Thank you (again), Hazzanet, for revealing all this. It seems from the extracts you post, given in particular the timescales, that an aggrieved Service User's best route is normally to pursue the Payer direct.

I think the dialogue should therefore go on the lines:
Payer: I want to claim under the direct debit guarantee.
Bank person: OK. We'll refund you today. It would be helpful if you could tell me what's wrong - eg you never signed any direct debit, or they've taken the wrong amount, or not given the promised notice.
Payer: [whatever]
Bank person: Thanks. Just to make it clear, if they think they're in the right, they can invoke any penalties in your contract with them, and chase you for payment. However, that's between you and them, and nothing to do with us.

Hazzanet

YoungNick wrote: »

Thank you (again), Hazzanet, for revealing all this. It seems from the extracts you post, given in particular the timescales, that an aggrieved Service User's best route is normally to pursue the Payer direct.

The counterclaim/challenge process is, as I've mentioned, heavily weighted to favour the payer, and so, anecdotally, most DDICs will go unchallenged. This is what the banking industry wants as they don't want to undermine confidence in the DD Guarantee which is understandable. However, the fact that the power in the guarantee leans so much towards the payer brings risk and uncertainty to the Service User in that a payer can consume a service for a period of years then walk into their bank and demand all previous payments back under false pretences using the DD Guarantee.

There have been a number of conferences with BACS who oversee the DD scheme where Service Users are pushing for them to bring certainty for Service Users to the scheme. The general consensus is to bring the scheme into line with other European countries where the defacto standard is you can reclaim no more than 13 months of payments under their equivalents of the DD Guarantee.

BACS are naturally reluctant and I honestly don't think they would want to make such a fundamental change to a guarantee that underpins confidence in a payment scheme that has ticked over nicely since 1970.

YoungNick wrote: »

I think the dialogue should therefore go on the lines:
Payer: I want to claim under the direct debit guarantee.
Bank person: OK. We'll refund you today. It would be helpful if you could tell me what's wrong - eg you never signed any direct debit, or they've taken the wrong amount, or not given the promised notice.
Payer: [whatever]
Bank person: Thanks. Just to make it clear, if they think they're in the right, they can invoke any penalties in your contract with them, and chase you for payment. However, that's between you and them, and nothing to do with us.

Bank training on the DD Guarantee is woefully poor.

I've seen instances where 7 years of DDs have been reclaimed because the bank told the payer that they couldn't reclaim just one DD.

Similarly, the question script that should to be in place isn't followed and I've seen streams of payments reclaimed because of a 'service issue' rather than a 'payment error issue'. As we know, the DD Guarantee is there to protect against errors made in the payment process rather than the fact that a payer is aggrieved by a poor level of service. The payer is then 'shocked' when they receive a letter asking for repayment within X days or the debt will be passed on to a collection agent.

I completely agree that the questioning done by the bank should be stepped up and the payer should be made aware at that point that the Service User can still pursue them for payment by other means if the money is genuinely owed.