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I see this kind of post on the forums quite regularly, the direct debit provider has claimed earlier and the bank have returned the Direct Debit unpaid. Normally that means being bounced from Bank to provider to bank to provider. So I decided to ask the FOS the question about this...
I hope you may be able to clarify the Direct Debit Guarantee Scheme rules and possibly the route the ombudsman would look at. I have read Ombudsman News Issue 27 April 2003
http://www.financial-ombudsman.org.u...-guarantee.htm
and Ombudsman News Issue 38
http://www.financial-ombudsman.org.u...-debits-38.htm
They both explain Direct Debits and the Guarantee. My question arises from when the Direct Debit is claimed erroneously and the bank return the item unpaid rather than paying it. In this instance the Direct Debit Guarantee Scheme does not appear to be valid even though an error has occurred. The individual occurs bank charges and is bounced literally between the company who made the error and the bank who declines to refund when it falls within the parameter of the DD Guarantee Scheme. It is seems to be a disparity in the scheme which as far as I can see is unresolvable. Had it been fraud, the bank would refund, if it had been paid the DD Guarantee scheme would get them a full refund. However, if the company make a mistake and the bank return the item unpaid they then have to spend weeks to repair what has been done.
Is there any further resource or can you offer a view that the ombudsman would take in this instance as I have outlined the issue of fraud and Direct Debit Guarantee Scheme where the item is paid?
I look forward to hearing from you
NWSM
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Their response was as follows:
I hope you may be able to clarify the Direct Debit Guarantee Scheme rules and possibly the route the ombudsman would look at. I have read Ombudsman News Issue 27 April 2003
http://www.financial-ombudsman.org.u...-guarantee.htm
and Ombudsman News Issue 38
http://www.financial-ombudsman.org.u...-debits-38.htm
They both explain Direct Debits and the Guarantee. My question arises from when the Direct Debit is claimed erroneously and the bank return the item unpaid rather than paying it. In this instance the Direct Debit Guarantee Scheme does not appear to be valid even though an error has occurred. The individual occurs bank charges and is bounced literally between the company who made the error and the bank who declines to refund when it falls within the parameter of the DD Guarantee Scheme. It is seems to be a disparity in the scheme which as far as I can see is unresolvable. Had it been fraud, the bank would refund, if it had been paid the DD Guarantee scheme would get them a full refund. However, if the company make a mistake and the bank return the item unpaid they then have to spend weeks to repair what has been done.
Is there any further resource or can you offer a view that the ombudsman would take in this instance as I have outlined the issue of fraud and Direct Debit Guarantee Scheme where the item is paid?
I look forward to hearing from you
NWSM
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Their response was as follows:
Thank you for your e-mail.
In respect of the guarantee, it is designed to ensure that if a claim is made against the account erroneously, then that money should be paid back to the account straight away with the assistance of the account holding branch. In respect of the circumstances you describe, a claim was made and the payment was 'bounced', meaning that no payment left the account.
In relation to charges, if the debit was claimed incorrectly, or in excess of the amount that should have been claimed, we would normally suggest that evidence is obtained of the charges and this should be presented to the claimant of the debit so they can arrange to consider refunding the charges (if they made a mistake in claiming the debit). We would not normally consider a complaint about bank charges in relation to the error being made by the claimant. We would ordinarily consider the complaint if it is clear that the bank made a mistake. Whilst bank charges are on hold pending the High Court case, if the bank made a mistake and will not refund the payment, then I think we would consider that complaint.
I hope this information is of assistance.
In respect of the guarantee, it is designed to ensure that if a claim is made against the account erroneously, then that money should be paid back to the account straight away with the assistance of the account holding branch. In respect of the circumstances you describe, a claim was made and the payment was 'bounced', meaning that no payment left the account.
In relation to charges, if the debit was claimed incorrectly, or in excess of the amount that should have been claimed, we would normally suggest that evidence is obtained of the charges and this should be presented to the claimant of the debit so they can arrange to consider refunding the charges (if they made a mistake in claiming the debit). We would not normally consider a complaint about bank charges in relation to the error being made by the claimant. We would ordinarily consider the complaint if it is clear that the bank made a mistake. Whilst bank charges are on hold pending the High Court case, if the bank made a mistake and will not refund the payment, then I think we would consider that complaint.
I hope this information is of assistance.
