Direct Debits

nmoon83

Hi there

First post to the forums.
Just started in my new job working for Amicus Horizon Housing Association before that I worked with Barclays Bank for 5 years before being made redundant.
Amicus Horizon are setting up a project where we can help people setup Basic Bank accounts for our tenants so hopefully our tenants can access more savings due to paying direct debits and stuff.
However one of my tenants asked me a question which i wasnt sure of the answer.
Does a direct debit have to be setup for monthly debits? or can you tell the company that they are only allowed to debit money ever fortnight or weekly?
Reason i ask this is because alot of our tenants are getting benefits from the dwp and they only tend to pay fortnightly.

cheers hope someone can help

Mark7799

With a direct debit, you are giving the beneficiary access to your bank account. If they say they will debit at any time, they can - you are relying on the beneficiary company to accept what you offer (and carry it out!)

nmoon83

so in theory if you tell them what is acceptable on the direct debit mandate they can refuse it BUT if they accept it they have to go by those terms am i right? and im guessing if they dont go by those terms you can report them?

dzug

The direct debit mandate has standard wording - I doubt if you will get them to accept changes to it or even notice if you make any.

Provided they have notified you in advance they can take any amounts they like at whatever frequency they want. That's the point of it - it's flexible so that YOU don't have to inform the bank every time something changes.

Dishonest use of DDs is extremely rare - incompetent use probably more common but still trivial in the overall picture.

olly300

http://www.apacs.org.uk/payment_options/automated_payments_4.html


Does a direct debit have to be setup for monthly debits?
No you can have varying direct debits plus any period you like i.e. bimonthly, quarterly, annually

or can you tell the company that they are only allowed to debit money ever fortnight or weekly?
The point of Direct debits is to reduce administration by the company so you can tell a company to do this but they are unlikely to take action as increased frequency involves more administration for them i.e. chasing payments not going through, sending more letters of variable amounts. Some utility companies do give discounts for prompt payment even if the payment is not made by direct debit.

Reason i ask this is because alot of our tenants are getting benefits from the dwp and they only tend to pay fortnightly.

Another option is getting the person to set up direct transfers to come out after they are received the money. However the person concerned would have to use telephone or computer banking (local library, branch computer) so would it be more hassle to the account holder as they would have to learn about computer security i.e. clearing browsers, not letting people see what they are typing.

If you could set up an basic bank account with online access for a bank that uses the post office network, and has computers in their branches then it would help some people.