Direct Debits – What’s in the Guarantee

Direct Debits are  a very common way to pay bills –  some companies give extra discounts for paying by direct debit (Energy companies mainly) .   Companies prefer  direct debits  because that are in control of the payments – and they don’t have to process cheques or cash .
There are about 108 million direct debits a year in Ireland – and that figure has actually dropped snce 2008 when it was over 112 million a year.

There have been some recent problems with Eircom failing to take customer’s direct debits – and then taking 2 or 3 months charges in one go .  Some people are unsure about signing up for Direct Debits jsut because of things like this – where they feel thay have no control over their money.

We thought we would see what is covered by the ” Direct Debit Guarantee”  that  is provided by banks :

If you authorise payment by direct debit, then the direct debit originator should notify you in advance of the amounts to be debited to your account

Your bank will accept and pay such debits, provided that your account has sufficient available funds

If it is established that an unauthorised direct debit was charged to your account, you are guaranteed an immediate refund by your bank of the amount as long as you notify your bank without undue delay on becoming aware of the unauthorised direct debit.  Refunds can be requested upto 3 months after the date of the  debiting of unauthorised direct debit

If any variable direct debit exceeds the amount which you could reasonably have expected – you are entitled to request a refund . The refund must be requested from your bank within 8 weeks of the debit. The bank is entitled to ask you to provide proof  relating to your request for a refund

You can always request your bank to refuse any  direct debit payment on your account up to close of business the day before the direct debit is due to be paid from your account.