Unauthorised direct debit

denvore · 15 January 2017 at 2:35PM

Hello,

I have done a quick search of this site but would be very grateful for any advice anyone could offer me (or put my mind at ease) with regards to an unauthorised direct debit that I have noticed leaving my account please?

Today I checked online banking and realised that direct debit payments were leaving our account and going to a company we know nothing about. Also, this is an account we do not use for such things and have set up no direct debits on this account. I have phoned our bank and cancelled the direct debit - they also said that they would organise a refund and begin an investigation. This would seem to be a mistake, but I have never experienced this before and am a little worried about how this could have been set up without our consent.

To make matters a little more concerning a google search of the company shows that they are a financial services company that seems to specialise in debt collection. This makes me think that this could adversely affect our credit rating, or that cancelling may have further repercussions (you hear so many horror stories about collection companies refusing to believe you). I am also slightly surprised that the person who should be paying these payments has not noticed this.

Hopefully I am worrying about nothing, but I thought direct debit scheme was pretty robust and I have never had problems before. Any advice would be greatly appreciated.

YorkshireBoy · 15 January 2017 at 2:47PM

It won't affect your credit rating. Even if these payments put you in overdraft, whether authorised or unauthorised, your bank would arrange for any damage to your CRA files to be 'undone'.

The reason for the problem will be a simple keying error by the originator, ie debt collection company.

You've learned a valuable lesson here though...check your accounts more frequently, because "direct debit payments were leaving our account" would signify more than one monthly payment had been taken?

denvore · 15 January 2017 at 2:56PM

Thanks for your reply YorkshireBoy. I hope that you are correct in that it was a simple error - I admit that this is probably the most likely cause, but I am a pessimist by nature.

It is very good advice to regularly check statements more frequently and this is something I generally do for main accounts. But this is an account we generally do not use for day to day things and usually only check once a month. These direct debits were being taken weekly (which I found particularly odd) and therefore were not picked up until now.

denvore · 16 January 2017 at 9:51AM

Well phoned the company this morning (more out of courtesy than anything else) and they didn't seem to bothered/surprised. I got the impression that this sort of thing is more common than I initially thought.

I must admit to losing a little bit of faith in the Direct Debit system. It seems that theoretically there is nothing stopping anyone paying for services and just making up an account number / sort code to set up payment. I might make the move back to standing orders. Does anyone know of a current account that does not accept or handle direct debits?

grumbler · 16 January 2017 at 11:58AM

Post Office: Basic Bank Accounts

For Barclays, Coop and Virgin the article says "if you try to make these payments too often without funds, there's a possibility these banks could cancel your direct debit facility". I think that they can similarly cancel on the account holder's request.

denvore · 16 January 2017 at 12:09PM

Thanks Grumbler I'll have a look into this. Bit of a shame that I would likely have to give up other benefits if I wanted to protect against spurious direct debit but a basic account may be an option.

JuicyJesus · 16 January 2017 at 12:12PM

denvore wrote: »

Well phoned the company this morning (more out of courtesy than anything else) and they didn't seem to bothered/surprised. I got the impression that this sort of thing is more common than I initially thought.

I must admit to losing a little bit of faith in the Direct Debit system. It seems that theoretically there is nothing stopping anyone paying for services and just making up an account number / sort code to set up payment. I might make the move back to standing orders. Does anyone know of a current account that does not accept or handle direct debits?

You're unlikely to find an account that doesn't accept or handle DDs but does SOs, has a debit card etc. I don't think such a thing exists.

In all honesty, you should be able to get a full refund on this very quickly, and from the sounds of things all of your other payments are going fine. That should reinforce your faith in DD, rather than make you lose it. The vast majority of DDs are perfectly legitimate and processed fine.

denvore · 16 January 2017 at 12:27PM

JuicyJesus wrote: »

You're unlikely to find an account that doesn't accept or handle DDs but does SOs, has a debit card etc. I don't think such a thing exists.

In all honesty, you should be able to get a full refund on this very quickly, and from the sounds of things all of your other payments are going fine. That should reinforce your faith in DD, rather than make you lose it. The vast majority of DDs are perfectly legitimate and processed fine.

You're right of course. The bank have been excellent and have began the refund/investigation process. I accept I am worrying about nothing really, I'm just a bit flabbergasted on how easy direct debits could (in theory) be abused.

McKneff · 16 January 2017 at 12:30PM

No one can actually make up an account number and a sort code. The numbers have to actually exist. This is why we should be vigilant and check our statements regularly .

I'm sure you will be fine

Norscbu · 16 January 2017 at 12:33PM

Is it possible someone you know might have your account details and took a chance on using them to pay off their own debts?

Personally, I'd push for more info on how the DD was originally set up. Your bank should have this info, i.e. was it organised online, did they receive a paper mandate etc. It's pretty hard to "guess" a valid account number and sortcode combination so I would remain sceptical about how they were obtained.

Likewise, I'd push for more info from the debt company, you should be able to obtain it via a formal request.

denvore · 16 January 2017 at 12:34PM

McKneff wrote: »

No one can actually make up an account number and a sort code. The numbers have to actually exist. This is why we should be vigilant and check our statements regularly .

I'm sure you will be fine

I agree that in practice it is unlikely, but if someone did (or mistyped a couple of digits) and it just so happens to be a valid account then it may be possible. At least that's what I'm assuming happened to me - the alternative that someone deliberately targeted me is not a pleasant thought.

Unauthorised direct debit

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