DD guarantee and disputes

lisyloo

I'm in dispute with a previous energy supplier.
They say I owe them about £500.
I say they owe me about £25.

I've instigated the DD guarantee (or indemnity as it seems to be called) to get my money back through the back as a last resort.

How do the bank decide whether it's a valid claim or not?

I'm pretty sure they don't spend hours wading through documents and looking at the merit of the arguments, so what do they do?

The DD was one of those regular monthyly payments so in that sense it wasn't an erroneous payment - they just owe me money (according to me).

I did ask them over the on-line help and they said they'd give me a call if there was an issue.

Buzby

the simple answer is - they don't adjudicate. They make you sign the indemnity which absolves them from any legal action when they reverse the payment, this leaves you soley in the firing line should the creditor decde to take further action. Usually, they allude to court action, but these days it is most likely to be a default on your credit file - but only if your creditor has been given pwemission (by you) to do so.

bsms1147

I'm interested to hear how they've come to feel you owe them money, while you feel they owe you. If you are correct, and they do owe you money, then stand your ground, get the reversal. Otherwise if there's a chance they may be correct, then you could be opening a can of worms by doing so.

InsideInsurance

They spend 2 minutes on the phone with you to establish why you believe it is an erroneous payment and if they believe you the money is back in your account before you put the phone down. If they dont believe you then its up to you if you want to register a complaint with the bank and then evidence comes into play.

The bank is basically guaranteed to get their money back from the merchant's bank as they have to hold a large pot of money there to cover these things and so your bank doesnt care really.

Of course this is all just about the money and doesnt change the liability. Just because a bank refunds the money via the DD Guarantee doesnt mean you are right nor that you dont owe the money. It does put the boot on the other foot though as its then up to the merchant to litigate against you and get a CCJ for the debt rather than you to chase them through the courts for your money.

lisyloo

Thanks all for your very useful and comprehensive comments.

I'm interested to hear how they've come to feel you owe them money, while you feel they owe you

The money is for gas used between Dec2013 and Mar2014.
Scottish Power have not correctly billed me until now - April 2015.

OFGEM have some "back billing" rules and to cut a long story short, if the consumer has tried to get it sorted and the supplier has messed up then the supplier cannot bill a consumer after 12 months.
SP claim they billed me in December (which they did), but I claim they used the wrong readings when the correct readings had been available since Mar 2013 (this is a specific scenrio that Ofgem define as one that means they can't bill me).

then you could be opening a can of worms by doing so.

I can't see how I am making things worse by claiming the £25 credit on my account. The oustanding £500 is large enough for them to pursue anyway.

I can take this to the energy ombudsman (and will do if necessary), but I'm confident enough about my case to present my evidence to a county court judge if necessary.

I have a complaint open. Currently I've presented them with the specific rules that I believe apply, so I'll wait for their response.
I don't believe they would take any action until their internal complaints process is finalised, but I'm happy to see them in court.

grumbler

lisyloo wrote: »

I'm in dispute with a previous energy supplier.
They say I owe them about £500.
I say they owe me about £25.

I've instigated the DD guarantee (or indemnity as it seems to be called) to get my money back through the back as a last resort.

How do the bank decide whether it's a valid claim or not?

If the company gave you an advance notice about the amount and the date, and you failed to cancel the DD, then IMO you don't have a valid claim.

lisyloo

Money back in my account yesterday with no questions asked.

I take grumblers point but after over 12 months I want the "boot to be on the other foot". I've given them plenty of time and opportunity.
If they want to sue me in another 6-12 months that's fine, but in the meantime I can get on with my life without anything outstanding from my side.

PeacefulWaters

My daughter had similar issues with Scottish Power.

It took months, but they finally backed down and removed their demands for c£400.

Keep at them.

footyguy

lisyloo wrote: »

I'm in dispute with a previous energy supplier.
They say I owe them about £500.
I say they owe me about £25.

I've instigated the DD guarantee (or indemnity as it seems to be called) to get my money back through the back as a last resort.

How do the bank decide whether it's a valid claim or not?

I'm pretty sure they don't spend hours wading through documents and looking at the merit of the arguments, so what do they do?

The DD was one of those regular monthyly payments so in that sense it wasn't an erroneous payment - they just owe me money (according to me).

I did ask them over the on-line help and they said they'd give me a call if there was an issue.

lisyloo wrote: »

Money back in my account yesterday with no questions asked.

I take grumblers point but after over 12 months I want the "boot to be on the other foot". I've given them plenty of time and opportunity.
If they want to sue me in another 6-12 months that's fine, but in the meantime I can get on with my life without anything outstanding from my side.

Despite your apparent short term success, you appear to have completely mis-understood and mis-used the Direct Debit Guarantee

(You initial success is simply because the paying bank takes the payer's word when making a claim)

What may happen is the supplier makes a defence/counter claim and requires the bank to repay the money you inappropraitely claimed.(unlikley)

Or what they will more likely do is recalculate your bill on a non-payment by DD basis (usually more expensive) and re-bill you accordingly.

So whether you did really owe them £500 or they owed you £25, after rebilling, you will almost certainly end up owing them money.

footyguy

Buzby wrote: »

the simple answer is - they don't adjudicate. They make you sign the indemnity which absolves them from any legal action when they reverse the payment, this leaves you soley in the firing line should the creditor decde to take further action. Usually, they allude to court action, but these days it is most likely to be a default on your credit file - but only if your creditor has been given pwemission (by you) to do so.

I've never signed any form of indemnity when making a claim under the DD Guarantee

I simply ask the bank and they refund...as they should do.

The bank will not be liable - they are acting in accordance with the Guide & Rules of The Direct Debit Scheme.

The Direct Debit is simply a method of payment; it has nothing to do with the underlying contract between the customer & supplier - another reason why the bank are not liable.

footyguy

InsideInsurance wrote: »

...Of course this is all just about the money and doesnt change the liability. Just because a bank refunds the money via the DD Guarantee doesnt mean you are right nor that you dont owe the money. It does put the boot on the other foot though as its then up to the merchant to litigate against you and get a CCJ for the debt rather than you to chase them through the courts for your money.

What usually happens is they will trash your credit history first, before employing debt collectors who will harass & chase you, before they eventually are forced to obtain a CCJ.