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One direct shun; The People's consumer Champion.

Byline: Dean Dunham

DIRECT debits are great for convenience but are a pain when they go bad.

People can be affected by fraudulent ones - and some of them can take your money even after you think you've cancelled.

Here's my handy guide, and how to tackle problems.


All banks and building societies are bound by the direct debit guarantee. This says:

If there is a change in the amount to be paid or the payment date, the person receiving the payment - originator - must notify the customer in advance.

If the originator makes an error, the customer is guaranteed a full and immediate refund of the amount paid.

The customer can cancel a direct debit at any time by writing to their bank or building society.

These rules therefore act as a protection to consumers.


Banks and building societies often give out incorrect information concerning direct debits.

The Financial Ombudsman service says the most common things consumers are told, incorrectly, are:

"We don't operate the direct debit guarantee." This is nonsense. ALL banks and building societies must follow it.

"You'll have to contact the originating company for a refund." No - you contact your bank or building society and they then have an obligation to act.

"We need a month's notice to cancel a direct debit." Not true. Under the guarantee you can cancel at any time.

"The guarantee doesn't apply because you haven't suffered a loss." Total rubbish.


If you want to cancel a direct debit, does not contact bank you should do so in writing, via a letter or email. Following this your bank or building society has an obligation to cancel the direct debit immediately.

If any payments are then sent after you cancel, you will be entitled to a full refund.


Unfortunately these are common because direct debits can now be set up electronically without the need for a signature.

The good news is that if a fraudulent direct debit is set up in your name you will be entitled to receive a refund from your bank or building society for any payments that have been taken out of your account.


CHECK your bank statement, and in particular your direct debits, monthly.

If anything does not look right, contact your bank immediately.

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Title Annotation:Features
Publication:The People (London, England)
Date:Apr 8, 2018
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