Direct Debit Mandate Question

Gaia2014

Does anybody know if a company can resubmit a direct debit mandate form to the bank even if I cancelled it with m bank (online)? ( didn't cancel the arrangement with the company in question. This has happened to me this month - three months after the original arrangement was cancelled.

Can anybody shed some light on this. I've been to my bank and they have cancelled the direct debit for me and I have also informed the company. Unfortunately it appears to be too late to reverse the payment that has just been made to the company from that specific bank account.

To put it into context. I still make payments by direct debit to the company as part of a credit agreement, but the arrangement is with another bank. I don't understand why the company resubmitted the mandate in the knowledge that I already have an arrangement set up with them. Could the issue be with the bank, or due to the fact that I didn't formally cancel the arrangement with the company. Very confused. The above matter now means that the company have received a two identical payments this month!

jonesMUFCforever

A company can re submit a new mandate but you have the D/D indemnity guarantee.
However cancelling the d/d does not cancel the contract - if you owe the money you owe the money - whether they claim it through a d/d or court action.

In this case it looks like one part of the company cannot see what the other side has/is doing.
Contact them advising them what has happened and ask for one payment back (assuming you are not in arrears).

YorkshireBoy

jonesMUFCforever wrote: »

A company can re submit a new mandate

They shouldn't do though, since the cancellation of the original instruction has been notified to them via a BACS ADDACS report.

OP, this is why the DD guarantee tells you to "Please also notify the organisation."

grumbler

>> Cancelling payments

Money shouldn't be collected from your account after you have cancelled and under the Scheme rules, an organisation would have to obtain your authority to reinstate a cancelled Instruction.

Westie983

A direct debit can be cancelled by the bank but you must also tell the company concerned as they have the authority to set the DD back up as you agreed to pay for goods or services by DD, if this payment method is not suitable you will have to make arrangements to pay another way. Cancelling a DD doesnt cancel the agreement/contract between you are the company, the bank is just the middle part of the transaction.

When cancelling a DD from the bank it does instruct you to cancel with the originator also, so they are aware that you will be making alternative payment.

grumbler

Westie983 wrote: »

... they have the authority to set the DD back up

No, they don't have the authority.

paragon909

Once you give a company authorisation to claim money from your account using direct debit, You can cancel, But the company just has to press a button to reauthorise, Since you previously authorised this is perfectly legal.

I know this is the process, Because I have processed payments using direct debit's.

Westie983

Yes they do have the authority, as soon as you sign up to pay by DD, you are agreeing for the company to set up a DD to allow them to take payment for goods and services, if you want to cancel a DD you need to inform the company of an alternative payment method, or that you have cancelled the DD as you have reached the end of the contract agreement if its a mobile phone, or insurance say...

Westie983

Working in a bank, I have this conversation with customers when they cancel their DD and I also have been on the receiving end with companies have resubmitted the DD mandate and the payment has gone out after its been cancelled by the bank and not with the company as well...

I may be wrong though, as I don't have expert knowledge on all companies but the majority of the ones I see in in my work can be resubmitted and set back up, as cancelling doesn't end the contract just the payment method, and thus the contract agreement between consumer and customer still stands, and if payment isn't received them DD can set back up, even if the account is closed and reopened.

grumbler

This just demonstrates once again how competent people working for banks, processing DDs and "pressing buttons" are, and that companies routinely breach DD regulations without hesitation - simply because nobody cares, nobody gets punished and in the worst case scenario the DD just gets recalled under the DD guaranty.

I can only repeat what I have already quoted:

Money shouldn't be collected from your account after you have cancelled and under the Scheme rules, an organisation would have to obtain your authority to reinstate a cancelled Instruction.

There is no such thing as a continuous authority to keep reinstating cancelled DDs. Each authorisation is one-off. Period.

Archi_Bald

According to the official DD website, an organisation would have to obtain your authority to reinstate a cancelled instruction.

http://www.directdebit.co.uk/DirectDebitExplained/Pages/Cancellingpayments.aspx

Also, FOS case 27/1 confirms that companies are not allowed to re-instate DDs without customer approval.

http://www.financial-ombudsman.org.uk/publications/ombudsman-news/27/27-directdebit-guarantee.htm