Can a direct debit be reversed after I have closed the account

FaceHead

Like so many others, my energy company went bankrupt. I was transferred to a new supplier on a given day and they have reimbursed the credit balance I had as of that day (a Saturday). 

However, on the Monday the old (now defunct) supplier took a further direct debit payment - probably processed on the Thursday while they were still in business, but not credited to them on the Saturday when they took the cut of customer credit balances and passed them to the new supplier. I've therefore been shortchanged in the reimbursement by the new supplier.

The new supplier seems to think they have done their bit by reimbursing the credit balance the old supplier told them about. 

My options are:

1. Complain to the new supplier, via the energy ombudsman if needs be. This is in progress, but the ombudsman could well come down on the side of the new supplier.

2. Use the direct debit guarantee, saying that the direct debit that came out of my account on the Monday was 'in error' as the recipient was defunct by then. 

The problem with 2. is that I have closed (switched) that current account, so I'm not that bank's customer anymore. Could they still reverse the DD and give it to me, say, via cheque? The old supplier's account has probably also been wrapped up by their administrator too. 

Thanks for advice. 

Olinda99

Use the direct debit guarantee would be the safest and fastest route. Just hope the bank accept it was an unauthorised DD because you cancelled it as they won't reimburse for contractual errors particularly if the supplier was still in business when it was taken etc

masonic

Your energy supply contract becomes void on the date a new supplier is appointed to take over your account. This is the date your new supplier will start billing you. You've noted that your account at the old supplier was closed in credit. The final payment was therefore not required, taken in error, and a guarantee claim should be honoured.

Thrugelmir

FaceHead said:

1. Complain to the new supplier, via the energy ombudsman if needs be. This is in progress, but the ombudsman could well come down on the side of the new supplier.

The new supplier is going to do what precisely? 

FaceHead

Thrugelmir said:

FaceHead said:

1. Complain to the new supplier, via the energy ombudsman if needs be. This is in progress, but the ombudsman could well come down on the side of the new supplier.

The new supplier is going to do what precisely? 

When an energy company goes bust, the new supplier is responsible for domestic credit balances. "Money you have paid into your account will be refunded to you if you are in credit [by the new supplier]".

https://www.ofgem.gov.uk/information-consumers/energy-advice-households/what-happens-if-your-energy-supplier-goes-bust

The regulator's intent is very much that customer's shouldn't lose what suppliers owe them if they go bust, as that debt will be passed to the new supplier.

However the mechanics of the process and how direct debits take a few days to process means payments can fall through the cracks and not he counted in the final credit balance. 

So is this an admin error and the new supplier is responsible? Or are they going to try to argue that the money wasn't paid into my energy account, as the account had been transitioned to them by the Monday when the payment arrived?

If the latter, that's a real technicality and against the intent of the regulator, so I'd say it's a 50:50 which side the ombudsman would come down. 

The reason for asking the bank account experts, rather than the energy board, is the title of the thread: Can I invoke the direct debit guarantee when my current account is closed? What is the mechanics for getting paid out?

masonic

FaceHead said:

So is this an admin error and the new supplier is responsible? Or are they going to try to argue that the money wasn't paid into my energy account, as the account had been transitioned to them by the Monday when the payment arrived?

The new supplier is responsible for passing on and covering any credit balance recorded by the old supplier. The old supplier gets put in administration, so has a principal responsibility for securing the best outcome for its creditors. Customer accounting takes a back seat. Therefore it can take many weeks or months to deal with payments received after the insolvency commenced. Eventually, a record of these would be passed on to the new supplier and another credit issued, but there will be a long queue of issues related to credit transfers to work through. This is why the DD guarantee route would be the best option to pursue.

molerat

I am surprised that a DD taken so close to the failure date was not picked up.  The old supplier does not cease to supply on the date they announce their failure but on the date that the new supplier is appointed from which is usually around a week.  Which failed supplier is this ?