Direct Debit

[TCH]

when direct debit was invented, it was seen as a way to pay the utilities like the telephone company

whatever may be said against them, they are fairly honest

one could overhear the remark 'I pay everything by direct debit'

the honesty has engendered a certain complacency

we are happy to authorise any one-man business to dip into our bank account and to scoop out as much as he likes

am I alone in feeling uneasy about this

 

[Ozzy]

am I alone in feeling uneasy about this

Yeah, because as a Direct Debit Originator myself my business has to adhere to very strict procedures and securities before we are authorised to be able to offer direct debit as a method for our customers to pay us.

We cannot...

dip into our bank account and to scoop out as much as he likes

 

[MyAccountantOnline]

.... complacency

Time saving, ease and convenience are I feel more appropriate.

And we do have the direct debit guarantee so no I don't feel uneasy about direct debits.

 

[Mark T Jones]

As mentioned, the direct debit guarantee goes a long way to addressing concerns

Any payment method will attract some abuse, I'd suggest that direct debit is no worse than any other

 

[AlanJ1]

I'd suggest that direct debit is no worse than any other

I would actually go and say it's better than most because of the guarentee.

Thanks
Alan

 

[DontAsk]

The problem is when someone like PayPal takes money for a refund that you dispute. I don't think you can invite the DD guarantee in that case. So some companies can do into your account and take as much as they like.

See also cases of ridiculous energy bills being taken by DD. Yes there's a guarantee, but it's a lot of stress until you get a refund.

 

[AlanJ1]

See also cases of ridiculous energy bills being taken by DD. Yes there's a guarantee, but it's a lot of stress until you get a refund.

Agreed but from my only experience of using the guarentee, I had my money back within 24 hours.

 

[numbersrule]

I don't dispute all the posts about the Direct Debit Guarantee but, I must say, having started using a Direct Debit service for receiving customer payments, I was somewhat surprised about how easy it is to set up and use.

There is likely to be a price to be paid for simplicity, ease and convenience.

 

[Ozzy]

I was somewhat surprised about how easy it is to set up and use.

Are you setup as an originator direct with the banks, or using a third-party provider?

I am curious, because for us we had to provide a 3 year business plan to the bank, including forecasts and cashflow forecasts, copies of our financial operating procedures, and separate documentation detailing where in the business plan the DD facilities will impact.

[edit] This was about 15 years ago mind, so granted things may have changed.

 

[Daybooks]

Are you setup as an originator direct with the banks, or using a third-party provider?

I am curious, because for us we had to provide a 3 year business plan to the bank, including forecasts and cashflow forecasts, copies of our financial operating procedures, and separate documentation detailing where in the business plan the DD facilities will impact.

[edit] This was about 15 years ago mind, so granted things may have changed.

Now you’ll probably have had to repeat AML and KYC stuff just to get an application form. I suspect it was via a third party otherwise the OP might have a point. Nonetheless the third party would still need to give the guarantees.

 

[numbersrule]

Are you setup as an originator direct with the banks, or using a third-party provider?

I am curious, because for us we had to provide a 3 year business plan to the bank, including forecasts and cashflow forecasts, copies of our financial operating procedures, and separate documentation detailing where in the business plan the DD facilities will impact.

[edit] This was about 15 years ago mind, so granted things may have changed.

It was a third party provider.
We didn't have to provide a business plan, nor financial forecasts, nor operating procedures.
We did have to sign up to some terms & conditions, so that seems to be their control.
This is recent in the last 12 months.

 

[numbersrule]

Now you’ll probably have had to repeat AML and KYC stuff just to get an application form. I suspect it was via a third party otherwise the OP might have a point. Nonetheless the third party would still need to give the guarantees.

I don't recall being asked for any AML or KYC stuff.
But my business is regulated anyway with regard to AML and KYC so maybe that ticked the box for the third party?

 

[numbersrule]

I don't recall being asked for any AML or KYC stuff.
But my business is regulated anyway with regard to AML and KYC so maybe that ticked the box for the third party?

Having looked into this, we did go through a verification process, ie ID.
And the terms and conditions are comprehensive.

 

[TCH]

I was unaware of the direct debit guarantee, my thanks to everyone for drawing it to my attention

it seems to be a mechanism for rectifying error, which is well and good, but does it require the payee to acknowledge the error? it invites a rejoinder like

'there has been no error, we have increased our monthly charge'

or in the case of something like a phone company

'there has been no error, that's how many calls you made'

it is doubtful the guarantee can be invoked in such a case

there seems to be no provision for putting a cap on monthly payouts, though there’s no technical impediment – it’s just another column in a database table

and what about the American company that hosts some of my websites, are they subject to British rules and regulations?

a standing order seems preferable, in the case of a series of equal payments - it would feel less like signing a blank cheque but it is rarely offered

the usual thing is to get the customer on board with a low monthly charge, and to then gradually increase the charge and to rely on customer inertia. Perhaps it isn't bait-and-switch but it comes pretty close

 

[Mark T Jones]

I was unaware of the direct debit guarantee, my thanks to everyone for drawing it to my attention

it seems to be a mechanism for rectifying error, which is well and good, but does it require the payee to acknowledge the error? it invites a rejoinder like

'there has been no error, we have increased our monthly charge'

or in the case of something like a phone company

'there has been no error, that's how many calls you made'

it is doubtful the guarantee can be invoked in such a case

there seems to be no provision for putting a cap on monthly payouts, though there’s no technical impediment – it’s just another column in a database table

and what about the American company that hosts some of my websites, are they subject to British rules and regulations?

a standing order seems preferable, in the case of a series of equal payments - it would feel less like signing a blank cheque but it is rarely offered

the usual thing is to get the customer on board with a low monthly charge, and to then gradually increase the charge and to rely on customer inertia. Perhaps it isn't bait-and-switch but it comes pretty close

You'd need to read up in all the rules - I haven't, but o do know that originators are required to give prior notification of changes

Are you actually referring to the contract itself rather than the DD?