Direct Debits

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A Direct Debit is an agreement between you and a service provider (such as a telephone company) giving authority to the service provider to withdraw money from your bank account.

In this agreement, you authorise the service provider you want to pay to collect an amount (which may be variable or fixed) from your bank account (even an overdraft facility) on a periodic basis or as a one-off payment without any further action on your part.

Once you have agreed to the contractual terms of a Direct Debit, the money will be deducted automatically. A Direct Debit can be set up to pay on a particular date every month, quarter or year.
The service provider will give you prior notice of the amount and date of collection.
If the service provider you are paying wants to change an amount or date of collection, it has to inform you before it affects any changes.

Authorising a service provider to collect payment from your debit or credit card is not a Direct Debit. See section on Continuous Payment Authority for more information.

Only you can change the date or payment amount on your Standing Order. This is the main difference to a Direct Debit where these details can be changed by the service provider you are paying.
Some banks charge a fee for executing a Standing Order. Neither banks nor service providers charge for a Direct Debit.

It is efficient:

A Direct Debit is a simple and secure way to manage regular payments from your account in accordance with your instructions. The efficiency and security of Direct Debits is monitored and protected by your own bank.

It can save you money:

Neither the service provider nor the bank will charge you for a Direct Debit. Indeed, service providers find Direct Debits just as convenient and efficient as consumers. For this reason, many offer discounts on the amount due in return for you paying by Direct Debit. Moreover, you will not incur any charges for late payments.

It gives you peace of mind:

In the event of an error, you have the right to ask your bank to immediately reverse the amount of the transaction. You do not need to give details as to your decision. In addition, if there is any change to the date or the amount, the service provider has to inform you in advance. Most importantly, you have the right to cancel the Direct Debit at any time.

It saves you time:

Modern life is hectic – but Direct Debit helps. It takes away much of the hassle associated with paying bills, and puts an end to queuing at the bank, the post office or the service provider’s offices, and/or filling out cheques. You will find it easier to stay on top of your bills, and you’ll know exactly how much money is going out each month.



Last updated: Sep 07, 2016