Direct Debit Indemnity Guarantee

Issy707

I spoke with First Direct this morning regarding an unauthorised direct debit payment taken from my current account. I was put through to the specialist team that deal with claims under the direct debit guarantee due to the transaction being more than 24 hours old.

The advisor told me that the Direct Debit Guarantee has recently changed, and now the indemnity protection only applies if the bank themselves are able to reclaim the money from the company/organisation at fault. The bank provide an immediate refund to their customer, but if after 10 working days, the bank has not managed to recoup their money from the company/organisation, then the refund will be reversed and the funds taken from the customer's account once again, even if this leaves a debit balance.

I did question this, as I thought the bank held total responsibility under the terms of the indemnity guarantee, but I was told this is a new chance brought in recently to combat fraud.

Before the refund was processed, I was talked through a series of questions, which included giving verbal consent for them to recover the money from me if their efforts with the company fail, and also verbal confirmation that all information provided is true and accurate, otherwise an offence may be committed under the Fraud Act.

So it seems this 'guarantee' or 'indemnity' doesn't mean more any more.

colsten

This is complete nonsense. The DD Guarantee has not changed. You are entitled to an immediate refund. Ring them again, and if they give you the same spiel again, raise a formal complaint.

https://www.directdebit.co.uk/DirectDebitExplained/Pages/Howtoclaim.aspx

eskbanker

Quote them their own documentation, as in the DD guarantee section of http://www1.firstdirect.com/content_static/pdf/give_me_facts_1114.pdf:

If an error is made by the organisation or us, we will give you a full and immediate refund of the amount paid.

If, on the other hand, it proves not to be a mistake (i.e. if the company concerned can prove they were entitled to be paid), then they'll recover the funds from you after completing their investigation, which I believe is a ten day period, perhaps the way they relayed this was confusing?

agrinnall

Did you get the name of the advisor? I would make a formal complaint as it's clear that there is a training failure at FD.

meer53

This is the DD Guarantee, maybe the OP misunderstood ?

The Guarantee is offered by all banks and building societies that accept instructions to pay Direct Debits
If there are any changes to the amount, date or frequency of your Direct Debit the organisation will notify you (normally 10 working days) in advance of your account being debited or as otherwise agreed. If you request the organisation to collect a payment, confirmation of the amount and date will be given to you at the time of the request
If an error is made in the payment of your Direct Debit, by the organisation or your bank or building society, you are entitled to a full and immediate refund of the amount paid from your bank or building society
If you receive a refund you are not entitled to, you must pay it back when the organisation asks you to
You can cancel a Direct Debit at any time by simply contacting your bank or building society. Written confirmation may be required. Please also notify the organisation.

DrSyn

Companies are carefully vetted before they are allowed to join the Direct Debit scheme. In addition you are protected under the 'Direct Debit Guarantee' (details provided below) against payments claimed incorrectly.

The Direct Debit Guarantee

The Guarantee is offered by all banks and building societies that accept instruction to pay Direct Debits
If there are any changes to the amount, date or frequency of your Direct Debit the organisation will notify you (normally 10 working days) in advance of your account being debited or as otherwise agreed. If you request the organisation to collect a payment, confirmation of the amount and date will be given to you at the time of the request
If an error is made in the payment of your Direct Debit, by the organisation or your bank or building society, you are entitled to a full and immediate refund of the amount paid from your bank or building society
If you receive a refund you are not entitled to, you must pay it back when the organisation asks you to
You can cancel a Direct Debit at any time by simply contacting your bank or building society. Written confirmation may be required. Please also notify the organisation.


The above comes directly from the First Direct site today. Nowhere does it state what you say you where told by First Direct.

I expect some misunderstanding has taken place somewhere.

I would get in touch with FD, if this turns out not to be a misunderstanding and what you have posted is correct, get them to confirm it in writing to you.

Then send this confirmation to BBC's Radio 4 "Money Box" program. I am sure they would be very interested, if the FD guarantee has really been changed.

GingerFurball_2

Nothing in the OP contradicts anything in later posts. The OP clearly states that First Direct are paying an immediate refund, what First Direct are making him aware of is scenarios where the amount refunded can be redebited.

colsten

GingerFurball wrote: »

Nothing in the OP contradicts anything in later posts. The OP clearly states that First Direct are paying an immediate refund, what First Direct are making him aware of is scenarios where the amount refunded can be redebited.

The OP reported that FD "told me that the Direct Debit Guarantee has recently changed". There is not a shred of truth in the statement that the Direct Debit Guarantee has recently changed.