Direct debits query

[redfox]

I called in to my bank and cancelled a DD. The cashier obliged with the request then informed me that if the company that the DD is attached to think that I still owe them any money then they can reinstate my DD and have money withdrawn from my account without my authority. I said I don't think that was allowed and once a DD was cancelled that was that and it cannot be reinstated without my authority. The cashier was adamant that they could. It wasn't worth arguing about as all my finances are in order anyway. Was the cashier correct? Can a cancelled DD be reinstated without the account holders authority?

[PallasAthena]

According to PayUK, the organisation responsible for the DD system in the U K, you are right and the bank employee is wrong.

https://www.directdebit.co.uk/direct...ling-payments/

[echat11]

I called in to my bank and cancelled a DD. The cashier obliged with the request then informed me that if the company that the DD is attached to think that I still owe them any money then they can reinstate my DD and have money withdrawn from my account without my authority. I said I don't think that was allowed and once a DD was cancelled that was that and it cannot be reinstated without my authority. The cashier was adamant that they could. It wasn't worth arguing about as all my finances are in order anyway. Was the cashier correct? Can a cancelled DD be reinstated without the account holders authority?

They can try, the best thing is to write to the bank and merchant saying the DD mandate has been cancelled.

Remember you also have the Direct Debit Guarantee to fall back on if they do debit and you believe it to be wrong.

If the bank disagrees with you, you complain, get a final response and make your case to the FOS.

[redfox]

Thanks

I emailed the website https://www.directdebit.co.uk/direct...-direct-debit/ with the same query. This was their response:

"If money is still owed by yourself to a company it will still need to be collected from you, if for instance you cancelled the direct debit knowing you had outstanding payments ,the company can reinstate the collection for the outstanding balance"

[echat11]

Thanks

I emailed the website https://www.directdebit.co.uk/direct...-direct-debit/ with the same query. This was their response:

"If money is still owed by yourself to a company it will still need to be collected from you, if for instance you cancelled the direct debit knowing you had outstanding payments ,the company can reinstate the collection for the outstanding balance"

It's all a bit 'murky', check your Terms and Conditions, in essence it could mean that you don't owe money and they could still debit. What they are saying is, there is no point cancelling a Direct Debit.

When you cancel a Direct Debit, they tell you to inform the merchant.

[PallasAthena]

That is an interesting response from them redfox as it's contrary to what their website says.

If the alleged debt is in dispute does that mean your bank has to adjudicate on whether the debt is owed? Or just pay it on the say-so of the company? They might be scammers.

What do they think is the legal.basis that allows your bank to ignore your express instruction not to pay anything further to the company?

And how would that be consistent with the wording of the DD guarantee?

If I were you and had the time on.my hands to pursue this I would be pressing them to answer these questions. And if they start ducking and diving and saying it's up.to.your own bank I would put the question to my bank in challenge to what their employee said. What exactly would be their legal.justification? How would they determine whether you owed the money?

I wonder what the FOS would say?

[des8]

I bet the bank staff (and even the plonker at the Direct Debit Co.) don't know the difference between a Continuous Payment Authority and a Direct Debit
The former are notoriously difficult to cancel.

Can't get the staff now a days.... I blame Brexit!

[redfox]

I even said to the bank teller " okay then I am instructing you now that you must not pay #the company in question# any request for any payment from my account in future. The teller would not take my instruction.

[PallasAthena]

That surely warrants a formal complaint to your bank for refusal to accept a 'do not pay' instruction.

[redfox]

That surely warrants a formal complaint to your bank for refusal to accept a 'do not pay' instruction.

The complaint is already in, we shall see what they say.

[redfox]

Update

Well I had a phone call from the complaints department. The person I spoke to said and I quote

"I don't know if a company or the bank can or cannot re instate a DD without your authority"

This came from a person with well over 20 years bank experience(yes I asked) they also said

"We don't know everything"

The case goes on.

[jaguarsuk]

I worked in banking, albeit some 20 years ago now, but the Direct Debit guarantee said back then that you or the originator (company) can cancel the mandate at any time.

To recommence payments the originator would require a new mandate to take any further payments.

The guarantee also incorporated that if you cancelled a mandate and any further payment went out without a new mandate having been obtained that the bank must refund the customer immediately.

Now, unscrupulous companies were known to just set up new mandates without obtaining authority as it's all done electronically, but it usually didn't matter as that mandate would be cancelled and per the guarantee the money refunded.

I very much doubt that the banking industry has relaxed the practice in the way the cashier was suggesting.

[redfox]

Update

Not heard back from bank yet but in the meantime I fired off a query to PSR(payment service regulator). I won't post all the waffle but one part made me sit up. I didn't think your bank would/could get involved in contract disputes between a company and a payee but reading this it suggests the bank can chase you on behalf of the company. I copy:


It is also worth mentioning that while individuals are well within their rights to cancel future direct debit payments with their banks and building societies to prevent further payments being taken, if there is an existing and ongoing contractual obligation to pay an agreed sum for which you carry on receiving goods or services, then your bank or building society might be able to chase you to organise an alternative payment method to obtain any outstanding payments.

[PallasAthena]

Curiouser and curiouser. Although it's a bit vague and hedged with "if" and "might".

I wonder what you could ask to try and pin them down?

Here's a suggestion. If the organisation wanting your money alleges you have a contractual obligation to pay them but you dispute that and say the alleged contract isn't valid then what is the bank's role? Do they make a formal adjudication on the the merits of the arguments of the two sides?

Another linked question: "might be able to chase you" is vague and non-specific. Can they clarify exactly what that means? Does it mean they can mandate that you pay via an alternative payment method? And if you don't they can withdraw your banking facilities? Or does "chase you" mean merely to ask if you'd like to set up an alternative method? A suggestion that you can ignore?

[redfox]

Curiouser and curiouser. Although it's a bit vague and hedged with "if" and "might".

I wonder what you could ask to try and pin them down?

Here's a suggestion. If the organisation wanting your money alleges you have a contractual obligation to pay them but you dispute that and say the alleged contract isn't valid then what is the bank's role? Do they make a formal adjudication on the the merits of the arguments of the two sides?

Another linked question: "might be able to chase you" is vague and non-specific. Can they clarify exactly what that means? Does it mean they can mandate that you pay via an alternative payment method? And if you don't they can withdraw your banking facilities? Or does "chase you" mean merely to ask if you'd like to set up an alternative method? A suggestion that you can ignore?

I will try that. On a better note in regards this, I have now got a reply from Pay UK who own and operate Bacs who have asked me in response to my post (4) above:

"As a follow up action, If you are able to provide the “INC” reference (if given), on the email between you and the Bacs representative, alternatively, where you sent your email along with the date and time, then Pay.UK can explore where training refreshers may be required internally."