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Unauthorised direct debit set up!
vickyloutattou
Posts: 1 Newbie
I was checking my bank account this morning and noticed a new direct debit had been set up by LP1 Collections? I only have 2 small student debts which are both nearly cleared so how and why would a random collections agency be accessing my account? I have cancelled the direct debit now and will be popping to the bank later today. Has anyone else had similar issues with this?
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Comments
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It's surprisingly easy in UK for anybody to set up a DD for any account that you only know the number and the sort code for. The entire system is just designed unprofessionally by incompetent people.
Luckily, there is a DD guarantee in place that protects us.0 -
It's surprisingly easy in UK for anybody to set up a DD for any account that you only know the number and the sort code for. The entire system is just designed unprofessionally by incompetent people.
Luckily, there is a DD guarantee in place that protects us.
Indeed, Jeremy Clarkson can vouch for that!0 -
"If you can bear to hear the truth you've spoken
Twisted by knaves to make a trap for fools"
Extract from "If" by Rudyard Kipling0 -
The entire system is just designed unprofessionally by incompetent people.
Normally I agree with you, grumbler, but on this one, I think you are wrong.
Hundreds of millions of direct debit transactions go through without a hitch every year in the UK. DDs make life easy for consumers when it comes to regular payments, and DDs save businesses massive amounts of money.
Just because now and then something goes wrong doesn't make the whole system unprofessionally designed by incompetent people. As you say, there is the DD guarantee, so nobody needs to be out of pocket for incorrect transactions.0 -
The only way I see of changing this is for the bank to notify you when a DD is setup to get your approval, but if you are proactive in checking your account then you'll see any unauthorized DDs setup and cancel them before they do any harm (and even if they did withdraw funds, you can claim it back as you say).It's surprisingly easy in UK for anybody to set up a DD for any account that you only know the number and the sort code for. The entire system is just designed unprofessionally by incompetent people.
So I don't see any problems with the current system.0 -
This has nothing to do with the procedure of setting up DDs that I meant. The procedure is obviously flawed since they stooped requiring the DD mandate to be physically signed. In fact, the system can be made much more protected with very little change. Every DD set by a company has to be approved by the customer via online banking, over a phone or in branch before it gets active. As simple as that.Normally I agree with you, grumbler, but on this one, I think you are wrong.
Hundreds of millions of direct debit transactions go through without a hitch every year in the UK. DDs make life easy for consumers when it comes to regular payments, and DDs save businesses massive amounts of money.
It's unacceptable that any customer can suffer as a result of the flawed system. The recent Wonga scandal with DDs clearly demonstrates this.Just because now and then something goes wrong doesn't make the whole system unprofessionally designed by incompetent people. As you say, there is the DD guarantee, so nobody needs to be out of pocket for incorrect transactions.
It takes time and nerves for the innocent victims to put things right. And customers are not supposed to be proactive and check their accounts daily or even weekly. If an incorrect DD gets detected, say, after 30 days there can be far to many consequences to rectify: bounced DDs and SOs, missed payments, late payments reported to CRAs, card payments declined at checkouts etc. Money will be refunded eventually, but I've never heard about any compensation for the stress, time and inconvenience.
And it's not unknown for a company to simply reinstate the DD after the customer cancels it on their side.0 -
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Was it some other payday loan company then? I can be wrong though on this count...
I remember somebody reporting money wrongly taken by Wonga from their current account.
ETA:
My memory did fail me
. The scandal that I mentioned indeed had nothing to do with DDs: Payday loan firm banned for allowing fraud then harassing victims 0 -
But the signature didn't mean anything. I remember signing one "d.duck" and it was still processed.This has nothing to do with the procedure of setting up DDs that I meant. The procedure is obviously flawed since they stooped requiring the DD mandate to be physically signed.In fact, the system can be made much more protected with very little change. Every DD set by a company has to be approved by the customer via online banking, over a phone or in branch before it gets active.
So customers set up DDs on the CC/etc, then complain about late payment fees and other charges because they forgot to check for when the DD made it onto the system so they could ring up the bank and tell them they wanted it made active. Or do you mean that the bank should send a letter to the account holder asking them to confirm the DD? Neither is really practical IMO.
A better idea would be the other way around: Secure or text message (but not email) saying something like "A new direct debit has been setup on your account to company X, If you have no knowledge of this please contact us."0 -
It's surprisingly easy in UK for anybody to set up a DD for any account that you only know the number and the sort code for. .....
Not quite 'anybody'. You have to be an approved originator to do it.But the signature didn't mean anything. I remember signing one "d.duck" and it was still processed.
.....
Well, yes, a signature on a DD mandate means much the same thing as a signature on a cheque. Which is basically, not a lot in the normal course of events; the paying bank will not look at it or check it against the account mandate. Unless someone flags up a problem.0
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