Question on Direct Debit Indemnity Claim

[CraftyPixel]

We provide Online ordering systems for takeaways and Restaurants. I have a customer who we agreed to split the payment of his site over 10 months, He has made 5 direct debit payments no problem, he has been getting regular orders through and we have been providing updates and changes on time.
Out of the blue he has decided to cancel his direct debit and has raised an indemnity claim with his bank which means we have to pay back over £500. We have now disabled his site completely as he refuses any communication whatsoever.
What I have read is that if a customer raises an indemnity claim then the banks automatically payback any monies, that basically leave companies like mine in the S**T as we have no recourse but to chase him through the courts which is expensive and timetaking.
The question, is there any appeal procedure in place to protect the company providing the service?

 

[The Resolver]

You can file a complaint with the Financial Ombudsman Service - http://www.financial-ombudsman.org.uk

They will decide if there was good reason to have reimbursed the payments. For example if the client claims breach of contract in that you had failed to deliver the sort of website he has ordered or that you had taken payments more than agreed then the FO may decide against you. But if he has no reason to have decided not to pay your claim may be upheld.

It may not be a good idea to disable the site since that may play into his hands. At the very least you need to be sure you have a good website development contract in place and signed by hi in which he agreed that you could disable for non-payment

 

[Andrew46]

The direct debit system is heavily weighted in favour of the payer and open to fraudulent and disingenuous indemnity claims. In your circumstances it imay be better to get the customer to set up a standing order rather than a dd.
I believe there are only very limited circumstances in which a counterclaim may be made within the dd scheme, and then only within 14 days after reimbursement has been made. Check with the bank.
There is a useful article on this subject at:
http://www.mortgagefinancegazette.com/features/clawing-back-direct-debits/

 

[CraftyPixel]

I have checked with the Ombudsman and thers nothing they can do, Im in the process of trying to speak to the clients bank Barclays but Its like banging my head against a brick wall, I cant get through to the right department. Im going to try my own bank see if they can intervene on my behalf

 

[The Resolver]

Puzzled by the Financial Ombudsman telling you there was nothing they can do. There is an 8 week gap before they can start a complaint to allow your Bank to deal with your complaint, but they are there for this sort of complaint. Unless of course you could not give them any reason to challenge.

 

[CraftyPixel]

Yes well that's their words. I dont understand what it has to do with my bank though as you mentioned. I use a DD bureau, I sign up the customers, the Burea then handles the BACS payments and the money goes into my account?:|

 

[and180y]

Not worth the paper it is written on.

Nearly got conned by an advertising company, cancelled the deposit cheque but forgot to cancel the dd mandate. Notice a weird dd coming out of our account to a name I didn't recognise. Googled the name and it is a prior name of the company I nearly dealt with.

I called the bank and they invoked the guarantee and gave me my money back. Last week they got intouch to say they are taking the money back as the company have produced a signed mandate.

I said that the mandate differs from the company who took the money so they agreed not to debit our account pending investigations.

They have now got back intouch saying they are taking the money and giving it to them and any issues need to be taken up with the company as it's nothing to do with the bank. (they haven't got the money back from the firm, apparently they pay it from the banks account).

So it's not as one sided towards the payer as you think. if you have the paperwork you will win. His bank may have refunded him but how do they get the money fom you.


On a personal note.

The moral of the story is if anyone from storemedia (or any of their crony companies) approaches you kick their arse out the door as the guy lied to me to get us to sign up!!

 

[CraftyPixel]

Good to know that I may have a chance of fighting back, I have a signed mandate and a cast iron contract of payment terms.
Scary thought though that at any point in the future I may have to fight this time and time again. A good moral is signatures on paper count