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Direct Debit

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Community Veteran
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Registered: ‎02-08-2007

Direct Debit

I guess most people on the forum will use DD to pay for things where the sum varies each month but what happens if a error occurs?

Consider the following hypothetical situation.......

I pay a company around £ 100 a month by direct debit but a error occurs ( computer error of course) a extra 0 is added and £1000 is taken from my bank account leaving me overdrawn resulting in other bills not being paid.

Now if that error is the banks fault then I understand they will refund the money and sort out any additional problems caused but lets say it's not the banks fault but the companies fault, what happens then ?

Sure your money will be refunded minus the amount you owe but what about all the other problems arising from being overdrawn will the bank still deal with those or will it correctly claim it was not their error and thus not their responsibility.

I stress the above is purely hypothetical but we do rely on companies we have DD with to get it correct.

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Community Veteran
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Re: Direct Debit

I had a bank error that caused an overdrawn problem. The banks fault if I remember correctly and they generally sorted things out.

But there was still a problem left for me. When "overdrawn" a DD failed and I received notification from that company that the DD was cancelled and the total was now payable. It took a few letters (no emails then) and getting them to talk to the bank before things were back to normal.

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Community Veteran
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Registered: ‎06-11-2007

Re: Direct Debit

For me,.... Direct Debit, is a lazy mans banking app. !... and a licence for the company`s that you allow to access your bank account to take YOUR money as they see fit...

example... a power company decides you are not paying enough "up front"  so they increase your DD.... a DD is valid until YOU advise THEM that you do not want to continue payiing it.. ( as I understand it ).. and THEY have to instigate Stop procedures from their accounting system, to YOUR bank to bring it into effect.

The only payment that I have for DD is the T.V. Licence, which is coming out of a separate account.. only for the TV licence.

All other bills are paid "on demand"... some say this is more expensive... true, it may cost a little more, but knowing that I am in control of MY bank account, and MY money... give me a sense of satisfaction.

Other stuff, that is a "regular payment", are paid by Standing Order.. which is in MY control , when I pay them ( due date ) .arranged when my account is "overflowing with money"  ! ! ( I wish ) ...

. or when I cancel them, it is on MY instructions.

Also... there is no "overpayment"... so no money of mine is sloshing around in some other company account EARNING THEM INTEREST, when it could be doing that for me in mine !.

There is less likelihood of being overdrawn, so there is less chance of having to pay for overdraft charges due to someone else`s mistakes,

 

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Re: Direct Debit

Where do you draw the line? I guess that debit cards, credit cards and even cheques are also open to abuse. I doubt that many of us take cash into a Post Office to buy a Postal Order in order to pay a bill by post these days. In the days when I used standing orders I have a vague recollection of having an odd problem with one.

Yes it's a pain if a DD payment goes wrong, but if you embrace modern technology you can keep an eye on things through on line banking whenever you like without having to wait for a Bank statement to drop through your letter box probably weeks after the event.

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Re: Direct Debit


@shutter wrote:

 

example... a power company decides you are not paying enough "up front"  so they increase your DD.... a DD is valid until YOU advise THEM that you do not want to continue payiing it.. ( as I understand it ).. and THEY have to instigate Stop procedures from their accounting system, to YOUR bank to bring it into effect.


 

 

Firstly they have to give you advance notice to any changes to the DD (e.g the amount, date or frequency of payments, secondly you can easily cancel a DD at any time via your bank...

 

 

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Re: Direct Debit

Yeah... Ok... so, what about the "small print" that they DONT tell you about.... the bit that (probably) says if you don`t agree to our demand for more money, then the service will be terminated...( probably somewhere deep in your T`s & C`s regarding Direct Debit payments..

 

A bit like the police, saying they are ASKING you to provide a breath sample, at the roadside.

. but if  you refuse, then you will be arrested.....  not much point in being polite then, is there?...

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Re: Direct Debit

A couple of days ago I told an energy supplier, who only do payment via DD, that I am cancelling a switch to them from my present supplier. Up until now, I have always paid via a quarterly bill and I am inclined to continue doing that even though it will cost more.

I did this after they told me that I would be paying in advance every month. Apparently, it is for my own good!

I do DD to Plusnet and to a couple of organisations with fixed payments.

So far PN have only overcharged me once ages ago and that got sorted quickly.

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Re: Direct Debit


@shutter wrote:

Yeah... Ok... so, what about the "small print" that they DONT tell you about.... the bit that (probably) says if you don`t agree to our demand for more money, then the service will be terminated...( probably somewhere deep in your T`s & C`s regarding Direct Debit payments..

I'm beginning to lose the logic now. Are you suggesting that if you pay by Standing Order then this does not happen? The only difference I can see is that with a SO you have the hassle of contacting your bank to ask them to increase the payment.


 

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Community Veteran
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Re: Direct Debit

Hassle ?  to be in control of YOUR OWN money?   or let some faceless wonder have access to your funds? ? ?

No big deal to change a standing order... really... and the best part of it is ... YOU actually control how much you increase it by.... not because the company says you aren`t paying enough, we want more of your money in  our bank, so it will give us more interest ... thank you very much.

Oh and don`t forget... if you change suppliers... and the new supplier wants less, and you have a fair bit of balance ( earning the previous company interest ...........................until you get it back).

 

. Hassle?  

 

yeah indeedy ... .

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Re: Direct Debit

Read the Direct Debit mandate that is sent out with any DD. In what must be getting on to 30 years of paying by DD, I've never had any issues using it. I used to use Standing Orders but way too much hassle using and setting them up. Bit like trundling down to the PO to pay a bill. Nearest PO is 5 miles away. Internet banking is so handy at times.

 

You are still in control of your money. Any excess errors and the bank must refund you immediately. As to utility companies, I have always found them more than happy to agree what one asks for. If there is any imbalance i.e. I've not paid enough to be with in their target range, I just pay the excess and carry on at the original amount. No big deal. As to changing suppliers, never had any issues. The money comes back into the account far quicker than a cheque will ever do. Direct debit means they can simply reverse the process. Something that can't be done with a SO either.

 

As to cancelling a direct debit, I have been known to just zap it without any prior notification to anybody. Surprising how good that is in getting the company's attention. 

Ever helpful. Grin Sure, I’d love to help you out. Now which way did you come in?
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Hero
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Re: Direct Debit

Maybe I'm biassed, having worked in a bank. DD raises no fear at all. Generally my energy suppliers have never increased the monthly debit inordinately, and have either accepted my offer straightway, or at worst been beaten by my prepared figures.

@shutter I'm sure you are innocent. ISTM from work experience, and from reading forums such as MSE, many DD problems arise from peoples'  disordered, undisciplined lives.

Finally, if a company gets it wrong, claim the bank's fees from them. They caused the charge. If they are sanguinary minded, complain and escalate to an ombudsman, should one exist.

No one has to agree with my opinion, but in the time I have left a miracle would be nice.
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Aspiring Champion
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Re: Direct Debit


@shutter wrote:

Yeah... Ok... so, what about the "small print" that they DONT tell you about.... the bit that (probably) says if you don`t agree to our demand for more money, then the service will be terminated...( probably somewhere deep in your T`s & C`s regarding Direct Debit payments..

 


 

So nothing factual to contribute then?

 

You're just going to shift the goalposts so you can continue with the terminal ignorance/conspiracies.

 

I suggest you go away and acquaint yourself with the DD mandate/Guarantee and come back when you're better informed...

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Re: Direct Debit

I avoid DDs as much as I can, but many companies will only accept payment by DD.

One problem with DDs is that the notice given by companies is now so short that if you are away for any length of time and not checking your e-mails, you might end up being overdrawn if there has been a price increase of some sort.

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Re: Direct Debit


@shutter wrote:

All other bills are paid "on demand"... 


Most of mine are. I stopped paying DD on my water as they seemed to have next to no flexibility on payment amounts. Over the year it was either a couple of pounds underpayment which they wouldn't accept or £40+ overpayment which I wouldn't accept.

So now I pay every six months when due. Much better for me with the money in my pocket, where it belongs, not theirs.

 

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Re: Direct Debit


@billnotben wrote:
I stopped paying DD on my water as they seemed to have next to no flexibility on payment amounts.

So now I pay every six months when due. Much better for me with the money in my pocket, where it belongs, not theirs


 

Presumably on a water meter? Mine without one is just for 10 payments a year. 9 being for fixed amounts, with the 10th being for the odd amount. The total amount adds up to the yearly bill.

Ever helpful. Grin Sure, I’d love to help you out. Now which way did you come in?