Cancelling direct debit

tech77

I went into my bank today to cancel a direct debit thinking it would be a piece of pi$$.
Turns out the bank can't actually cancel a direct debit (like they can with a standing order).

All they can do for me is stop it for a few months and in the meantime i have to make sure to contact the company myself to stop it for good.

So this means an unscrupulous company can in theory still authorise debits from my account any time in the future.

It sounds crazy that i can't actually authorise the cancellation of debits from my own account.

I'll think twice about setting up DD again if this is indeed the case.
Can anyone set me straight on this?

antoinolachtnai

It seems to vary from bank to bank.

The standards for this are very lax in Ireland compared to the UK. In the UK, any bank will reverse any direct debit for a certain number of days after it has gone through.

I was through this with Three and BoI two years ago. BoI will cancel it, but charge you 5 euros.

I suggest that you write to your bank right away instructing them not to accept any more direct debits from company X. If they do it again, complain in writing. At that point go to the financial services ombudsman (not that that will necessarily do you much good).

cgarvey

IPSO were reasonably clear on this, before. Basically, it's because the bank is a facilitator for the DD contract between you and the retailer (i.e. they're not directly involved). So you must provide notice to the retailer (which is only fair), in order to get a DD contract cancelled. As Antoin says, many banks will postpone the facility, and some charge for this. While other banks will cancel the facility without you demonstrating having cancelled with the retailer (which is unfair on the retailer).

As for unscrupulous companies, all you need do is serve them with notice of DD contract cancellation (as is your right, regardless of any monies outstanding), and CC/fax the bank with said notice.

antoinolachtnai

Up until 1995 or so, there was a rule in place between the banks that direct debits could even be charged back.

There is absolutely no question of it being unfair on the retailer to cancel the direct debit. You should be able to do this at your absolute discretion, the same as cancelling a cheque. This is how it works in the UK.

The bank isn't a party to the transaction, but they are responsible for your account. They should operate the account according to your instructions, not someone else's.

jor el

My reading of the direct debit guidelines and rules would indicate that your bank is lying you you. From this www.ipso.ie page it states:

Paying Banks Must:
Ensure that unauthorised and/or cancelled Direct Debits are intercepted and returned immediately on presentation.

The rights of the payer:
You can cancel the Direct Debit Instruction by writing in good time to your Bank.

If you are canceling a direct debit then you should write to the company in question (the originator) and the bank and inform both of them that you wish to cancel that DD. If the company refuses to accept your cancellation, for whatever reason, then they are in breach of direct debit rules and can be reported and possible have their direct debit facilities removed. The bank must also adhere to the rules.

Which bank was this by the way? I have experience of AIB saying something similar and refusing point blank to accept the customers request to cancel a direct debit. BOI and PTSB have no such problems (in my experience). It could just be that the person you spoke to didn't know what they were talking about too.

antoinolachtnai

Oh, this looks good. They have certainly put some shape on the DD rules since the last time I looked into this.

tech77

jor el wrote:

My reading of the direct debit guidelines and rules would indicate that your bank is lying you you. From this www.ipso.ie page it states:

If you are canceling a direct debit then you should write to the company in question (the originator) and the bank and inform both of them that you wish to cancel that DD. If the company refuses to accept your cancellation, for whatever reason, then they are in breach of direct debit rules and can be reported and possible have their direct debit facilities removed. The bank must also adhere to the rules.

Which bank was this by the way? I have experience of AIB saying something similar and refusing point blank to accept the customers request to cancel a direct debit. BOI and PTSB have no such problems (in my experience). It could just be that the person you spoke to didn't know what they were talking about too.

Thanks lads.
It was an AIB bank.
That www.ipso.ie page seems clear enough alright.
I'll probably print the pageoff and show it to them.

The person i was dealing with might have been a clown but she did specify that you could cancel Standing Orders this way but not DDs so she seemed to 'know' that much.

As for it being unfair on the company i can't see how it is.
Surely it's just another method of payment.
I was of the impression that any notification of the company of changes to the method of payment was purely out of courtesy.

@ jor el: When you say write to the company do you mean request a confirmation in writing back from them that it's cancelled.
(The company could easily say they never got the letter if you didn't get confirmation back).

Also what happened with your episode with AIB?

jor el

Write to the company and tell them you are stopping the direct debit. If they claim never to have received it then though on them. If the bank are doing what they are supposed to it won't make any difference to you. You could ask for a written reply but there's no real need, unless AIB start acting the bollox, but then they shouldn't if they're doing their jobs properly.

AIB basically told my sister that under no circumstances could she cancel a direct debit on her account, only the originating company could cancel it. They also told her that if the originator presented a canceled debit to the bank on three occasions, then the bank would automatically re-instate the direct debit without the customers permission. She told them to go screw themselves with their bullshit and charges and went to PTSB. She then asked PTSB about this when opening the account and they said there was no problem stopping a DD on your account as it's your money, not the banks and not the other companies.

MagicMarker

Well i'm very lazy and haven't bothered to read the replies. But with BOI 365 online you can cancel your direct debits in a matter of seconds. If you do it over the phone they just ask if you've contacted the persons/company involved to tell them to cancel it. Just say yes and they'll do it on their end no bother.

jahalpin

You would have to be very careful cancelling DD's without telling companies as it is normally in the companies terms and conditions that accounts must be paid by DD and cancelling a DD without their express consent would breach these conditions and they could end up prosecuting you for breach of contract

If for example you had signed a one year contract with a gym and you just cancelled the DD at the bank, you would have breached the contract and would be liable for such

MOH

jahalpin wrote:

You would have to be very careful cancelling DD's without telling companies as it is normally in the companies terms and conditions that accounts must be paid by DD and cancelling a DD without their express consent would breach these conditions and they could end up prosecuting you for breach of contract

If for example you had signed a one year contract with a gym and you just cancelled the DD at the bank, you would have breached the contract and would be liable for such

The IPSO page is quite clear that cancelling your DD in no way changes the contract with the company - you're still liable to pay them whattever you agreed by alternative means. Don't know if a gym would bother chasing you as long as you kept paying on time.

@OP:
If you go back to AIB and they still refuse to cancel your DD, tell them you want to close your account then and there. That should do it.

TheDriver

I went into my AIB few months back and cancelled my DD with UTV internet (I had changed) and they said that it was no problem, she printed out something that I had to sign etc and that was it.

tech77

TheDriver wrote:

I went into my AIB few months back and cancelled my DD with UTV internet (I had changed) and they said that it was no problem, she printed out something that I had to sign etc and that was it.

Yeah i signed something as well in AIB but they still told me that this would only ensure the DD would be stopped for a 3mth period. I was told If i wanted to ensure it was cancelled after this period i had to contact the company to stop it completely.

I have no problem with following the procedure:

1) Write to the company asking for cancellation
2) Write to the bank asking for cancellation
3) Keep a copy of the company letter and
4) Attach a copy of the company letter to the letter i send to the bank (to show them i cancelled with the company).

But i can't get a straight answer from anyone as to whether it is then impossible for the company to still have access to my account in future after all this is done.
I was definitely left in some doubt about this.

1) Someone from IFSRA tells me it is impossible.
2) Someone from AIB tells me it is possible (although improbable).

So according to explanation 2 an unscrupulous company can continue to take money from my account even if the above procedure is followed.

dahamsta

Antoin can probably confirm or deny this, but as I understand it the problem is that some companies have "super" DD status which allows them to reset DDs essentially without authorisation; or, to put it more accurately, using a previous authorisation. I'm not sure if that's still the case, but afaik it used to be the root cause of a lot of these problems.

adam

tech77

Well i've googled this and there seems to be a fair bit of confusion surrounding this.

A case in point is this thread www.askaboutmoney.com/showthread.php?t=39203
Here there seems to be doubt about whether a company can still access your account even after you follow proper procedure (ie registered letter to company and registered letter plus copy of company letter to bank).

In the UK they seem to be a bit clearer saying the important thing is to cancel with the bank and the bank have to tell the company. You should tell the company only out of courtesy the UK sources seem to say.

Some of the confusion may be due to the different types of DD's alright as the previous poster suggests, with one type of DD giving more power to the originator/company.

Still fcuking crazy that i can't be the sole author of what payment methods i make from my account imo.

Can anyone shed anymore light on this.

antoinolachtnai

I think the OP should write to AIB and IFSRA and ask them to explain the situation in writing. Then write up a complaint to the ombudsman outlining the correspondence and saying that you consider it unacceptable that AIB will not guarantee to protect your account from arbitrary direct debit charges by companies that are strangers to you.

jawlie

The standard of staff at the counter in most banks has declined much in recent years, and you really can't be sure what they are telling you is true, or something they are making up. Very often they have not a clue and make it up.

There are a number of defences we can take to these nit wits. Firstly, whe it comes to direct debits, never sign a DDM for your main account, but open a secondary account for each individual DDM you have, and a standing order from your account to this account for the monthly amount. This means you are in control and make sure you have a copy letter for each account to instruct your bank not to overdraw the account. SHould your bank then wish to keep paying the DDM after you wish to stop it, they are welcome to do so and you will not be financially liable. Funnily enough, when this happens banks invariably find thy do, after all, have the power to stop a direct debit. Funny that.

Secondly, if your bank refuses to stop a direct debit mandate from your account, tell them you wish to close your account with immediate effect. That normally sets the cat among the pigeons and, magically, they find they can, after all, stop the direct debit.

Thirdly, if a member of staff gets stroppy with you, tell them you just have to get what they are saying on your mobile phone camera as you want to be certain you don't misunderstand them should you wish to write a letter of complaint to the bank about the policy which they are outlining to you. ☺☻

tech77

antoinolachtnai wrote:

I think the OP should write to AIB and IFSRA and ask them to explain the situation in writing. Then write up a complaint to the ombudsman outlining the correspondence and saying that you consider it unacceptable that AIB will not guarantee to protect your account from arbitrary direct debit charges by companies that are strangers to you.

I've emailed IFSRA and they tell me Direct Debit is not their area. :rolleyes:
Here is their response:

Thank you for your email
As the Financial Regulator we do not administer or maintain the Direct Debit Scheme and therefore we do not have information re the proper procedures
for cancelling direct debits.

You have however, contacted the appropriate body which is IPSO and recevied the correct procedures and so I suggest that you contact your bank and present them with the information.

You are also correct that you are to notify the company that you want to
cancel the direct debit because there could be a delay in the bank notifiying
the company that you have cancelled the direct debit and they could
present it for payment once again.

Should you feel that you wish to make a formal complaint to AIB, I attach a
link to our factsheet How to make Complaint which will guide you through
the complaints process.

Link to factsheet: http://www.itsyourmoney.ie/files/publications/p_20070815
010619How_to_make_a_complaint.pdf

I hope this is of some assistance

Regards
Maria Donohoe
Consumer Information

Even though they say all this, I just received advice yesterday from someone else in IFSRA that i can indeed cancel a DD in my bank and anything else was 'nonsense'. He did say that just to be sure i should also cancel with the company (which of course i will) but that once it's cancelled in the bank the company cannot access my account.

But with the email above i now don't know what to think. Was this guy's advice official or was he just moonlighting as a DD expert while working in IFSRA. :rolleyes:
He was adamant and categorical in his advice on the phone and it wasn't just a casual remark. Yet IFSRA say they're not experts.
:mad: :mad: :mad:

I did talk to AIB complaints but they admit that even if you follow the procedure there remains the (small) possibility that an (unscrupulous/inefficient) company can access your account after a DD is cancelled. You will of course be refunded they hasten to add. (Eh yeah well of course i will but that's not the point. What if i fail to notice all this for a year say..)

TBH i thought the person i was talking to would throw a strop on the phone after i pressed her about this (small) possibility of a company accessing your account even after following correct procedure so i didn't pursue it any further for now.

I suppose i'll talk to IPSO. See what they can tell me.
Anyone know for certain who the proper people to talk to about this are?
IFSRA aren't apparently.

antoinolachtnai

I would push back on IFSRA. IFSRA is the regulatory body for banks. IFSRA are responsible for regulating this.

IPSO is a consortium of banks. It's not a regulator. AIB is (I assume) the biggest shareholder in IPSO. It's hard to see the complaint going anywhere there.

The other body you could try is the Office of the Director of Consumer Affairs. They will probably point you back to IFSRA though.

It might be worth checking the IFSRA legislation.

tech77

antoinolachtnai wrote:

I would push back on IFSRA. IFSRA is the regulatory body for banks. IFSRA are responsible for regulating this.

IPSO is a consortium of banks. It's not a regulator. AIB is (I assume) the biggest shareholder in IPSO. It's hard to see the complaint going anywhere there.

The other body you could try is the Office of the Director of Consumer Affairs. They will probably point you back to IFSRA though.

It might be worth checking the IFSRA legislation.

Thanks.
Got back on to IFSRA.
They say:
1) all they can do is advise me of the procedure for cancelling a DD

2) they admit an (unscrupulous) company may be able to access my account in future even after cancelling it.

3) they say they can't ensure this doesn't happen.

4) They say the only precaution against it happening is for me to be vigilant.

5) They say it's unlikely to happen. Ha!


So then a 'cancelled' DD doesn't actually mean cancelled then apparently.

He also seemed to be (deliberately?) obtuse and confused two issues:
1) the issue of any unresolved dispute with a company/originator
2) the issue of 'stopping a DD'

I thought they were totally separate and that any unresolved dispute with a company had no bearing on cancelling a DD.

He said if i had any problem in future my recourse would be:

1) the financial ombudsman to address the DD issue and
2) the National Consumer Agency to address any dispute with a company.

According to him both of these issues may have to be sorted out apparently before i could stop a DD.

Christ.

Incidentally there was a piece on TV3 news this evening about something similar.

johnnyrotten

Very simple solution:
1) Ask for bank manager
2) Tell him/her to cancel DD
3) If he/she refuses then close account and go elsewhere

tech77

johnnyrotten wrote:

Very simple solution:
1) Ask for bank manager
2) Tell him/her to cancel DD
3) If he/she refuses then close account and go elsewhere

Yeah I might do that.
Only thing is when they say 'cancelled' they don't actually mean cancelled apparently.
Their definition of cancelled seems to be at variance with your and my definition.

In other words they say they will 'cancel' the DD but when questioned about whether an (inefficient/unscrupulous) company can have future access to my account they cannot reassure me that my account will be secure.

Indeed they even admit there is a (small) possibility that this could happen even after 'cancelling' it.

(and that's apart from the specific scenario where there is an unresolved dispute having a bearing on a DD).

I prefer the dictionary definition of cancelled myself.

And according to IFSRA the only way to guard against this is permanent vigilance. :rolleyes:

antoinolachtnai

Don't close your account over this issue. It's better to stick and fight if you ask me. The reason is that banking in Ireland is really too small a shop for moving bank to make much difference.

My suggestion is that you write to the chairman of IFSRA complaining that you feel that your complaint was not properly considered or dealt with. You might like to cite section 33B of the Central Bank Act 1942 as amended, which provides:

(3) In performing its functions and exercising its powers, the Regulatory Authority is required to promote the best interests of users of financial services in a way that is consistent with—

(a) the orderly and proper functioning of financial markets, and

(b) the orderly and prudent supervision of providers of those services.

Further,

33S.—(1) The Consumer Director is responsible—



(a) for managing the performance and exercise of such of the functions and powers of the Bank under the enactments and statutory instruments specified in subsection (2) as the other members of the Regulatory Authority notify to the Consumer Director in writing from time to time, and



(b) for monitoring the provision of financial services to consumers of those services to the extent that the Consumer Director considers appropriate, having regard to the public interest and to the interests of those consumers.

...

(3) The Consumer Director has power to do whatever is necessary for or in connection with, or reasonably incidental to, carrying out the responsibilities imposed by subsection (1).



(4) The Consumer Director shall manage the functions and powers of the Bank referred to in subsection (1)(a) in a way that is consistent with—

(a) the orderly and proper functioning of financial markets, and

(b) the prudential supervision of providers of financial services.


(5) In managing the functions and powers of the Bank referred to in subsection (1)(a), the Consumer Director shall, as far as reasonably practicable, ensure that the resources of the Bank allocated for the performance and exercise of those functions and powers are used effectively, efficiently and economically.

(6) The Consumer Director may issue codes or impose requirements under an enactment or statutory instrument referred to in subsection (2), but only in the name of the Regulatory Authority and after those codes or requirements have been approved by the other members of the Regulatory Authority.


(see http://www.irishstatutebook.ie/2003/en/act/pub/0012/print.html#partii-sec20 )
As such, IFSRA is required to ensure that the operation of the direct debit scheme is orderly and efficient. Tell them that the DD system is one of the foundations of consumer banking. Explain to them the situation whereby the rules of one particular bank with respect to DD's are at variance with best practice in the industry. Tell them that you have a reasonable expectation that the biggest bank in the land would be required to conduct its DD system in accordance with best industry practice. Tell them that it is wholly unsatisfactory that they refuse to ensure that this happens. Tell them that you have a reasonable expectation that the regulator will take steps to ensure that problems like this, once identified are resolved. Tell them that if you suffer loss as a result of this failure to oversee and regulate, that you will feel justified in considering IFSRA to have acted negligently.

IFSRA are not very good at answering mail. Follow up with the chairman's office by telephone after one week and ask why they have not answered your letter.

(Yes, I have done this before.)

tech77

Thanks mate but TBH i don't think i have the time, patience or money to pursue it any further for now.

However if i find that after cancelling correctly that unauthorised transactions are still happening on my account i won't be happy.

But i presume this situation doesn't just apply to me but to all AIB customers.

BTW may i ask what your grievance was exactly and whether it was satisfactorily resolved.

antoinolachtnai

It would take patience, but it wouldn't cost you any money.

I am not very impressed with IFSRA generally. Their level of knowledge of their sector seems very poor. If you ask any question harder than what the people on that bus were asking, they will probably give you a wrong answer. They slways stick by their wrong answer until they are proven wrong. Specific issue was to do with whether IFSRA was supposed to regulate providers of mobile phone insurance. In general, they do, but IFSRA just don't bother. Was there a positive outcome? Sort of. I could have pushed it further.

MOH

antoinolachtnai wrote:

Don't close your account over this issue. It's better to stick and fight if you ask me. The reason is that banking in Ireland is really too small a shop for moving bank to make much difference.

Well, you could just close your account, then open up another one straight away. Of course if you're paid directly into your account or have anything else coming out of it it would be extra hassle.

But at least you'd be guaranteed your DD was cancelled.

dub45

IPSO administer the direct debit scheme and you should ring them and ask for the guy who looks after direct debits - I have spoken to him a number of times and he assures me that there are neglible numbers of problems with the direct debit scheme:rolleyes:

Ask him for IPSo's position on cancelling direct debits and that is the horses mouth view so to speak.

The main trouble (and there are many) with direct debits is that each agreement is not numbered so therefore cannot be stopped like a cheque. A company so long as it has your bank account details can keep presenting a direct debit on your account until the cows come home. The bank has no way of detecting a deduction as it comes in for presentation. There used to be regular reports of BT doing this in the BB forum after customers had cancelled their accounts.

Another feature which urgently needs to be added to the direct debit scheme is that a customers bank information is removed from that Company's records. There is no mention of this at all anywhere in the scheme.

Also the amount of information available to the payer when signing these mandates is absolutely minimal and should be formalised with all details of cancellation procedures etc etc.

Sponge Bob

and make sure you raise a complaint with the IPSO who stupidly believe that their 'system' works perfectly , otherwise this sort of crap will keep happening . www.ipso.ie

name and shame the bank to the IPSO

cgarvey

Couple of points to follow up on my last post.

+ IPSO is not regulated by IFSRA (unfortunately). Given that it is an outsourced (albeit outsourced to a bank consortium), it does mean at worst IFSRA have no more right to regulate than they have the ESB (who the banks also use!), and at best that it's a grey area no regulator would touch with a barge pole. Given that it's such a huge area for consumers, I'd hope that this changes

+ IPSO advice is conflicting over this. 6 months ago I rang, and was told what I posted earlier. Before that I rang with the same question about a year ago (and was told the same). Between those 2 calls I rang twice to be told that no notice need be given to the retailer. My last call 6 months ago resulted in a snippet of the DD contract (i presume it's the bank's, as I've never seen an originator's contract anywhere near as detailed) being emailed to me, which clearly states the bank must only cancel after notice has been given to the retailer (one thing that has since struck me, is that notice may not have to come from the consumer, the bank may send it on?)

+ Now IPSO website clearly states "You can cancel the Direct Debit Instruction by writing in good time to your Bank.", so I assume either the rules have since changed, or the bank is expected to forward said notice.

+ It is "unfair" to the retailer, because they have factored in the cost savings of DD and for you to cancel means that they incur direct costs associated with following up on payment, and the cost of the risk of non-payment, etc. You have a right to pay however you wish, and recent legislation will further protect that right, but a business will have to re-think pricing (and either increase it or not pass on potential savings to customers), because of it.

+ DD forms the basis of many consumer contracts which have nothing to do with IPSO (or IFSRA or any bank), so just make sure than in your T&C/contract that you're not expected to cancel with them in advance (aside from any other obligation you may have with your bank, etc.)

+ There are super-originators as Adam suggests, still. eircom and NTL have both (in the last 12 months) re-instated DD. The funny thing is that I've long since left both services, all fully paid up. Both "claim" it was an accident, and eircom refunded me the amount plus a fiver towards my costs. BoI wanted me to follow it up with the retailer before they'd entertain charging it back (as is their obligation under the DD contract!).

To sum up. Direct Debit is a mess, and it would only take a couple of very basic steps to make it in to a decent payment system that can better protect all 3 parties involved.

dub45

cgarvey wrote:

Couple of points to follow up on my last post.

+ IPSO is not regulated by IFSRA (unfortunately). Given that it is an outsourced (albeit outsourced to a bank consortium), it does mean at worst ..................

To sum up. Direct Debit is a mess, and it would only take a couple of very basic steps to make it in to a decent payment system that can better protect all 3 parties involved.

The really awful thing about the dd scheme (and there are loads of awful things!) is that the customer who is wronged has absolutely no comeback whatsoever - there is no scope in the scheme for the biller who constantly abuses the scheme to be sanctioned. Your bank is supposed to complain to the sponsoring bank (a company has to be sponsored in the dd scheme) now can you imagine in this day of cutting back office staff any bank actually complaining to another bank and then getting that bank to take action. That sponsoring bank will of course be making lots of money from their business customers so are they going to do anything?

Another very grey area in the scheme is where companies put on a charge if you miss a direct debit - I dont mean the bank charges but the companies themselves. For example the ESB impose an administrative charge if a dd is missed - I challenged them on this a while ago on the basis that this charge is not forewarned to people when they sign up for direct debits and I got a refund but how many people dont even notice this. I believe these charges where they are not advised to the customer when they are signing up for a direct debit are illegal. IPSO said they had nothing to do with them of course!!!! It can cost upwards of 25 euros to miss a direct debit which is a laot of money which of course the non dd customer is not affected by.

antoinolachtnai

cgarvey wrote:

Couple of points to follow up on my last post.

+ IPSO is not regulated by IFSRA (unfortunately). Given that it is an outsourced (albeit outsourced to a bank consortium), it does mean at worst IFSRA have no more right to regulate than they have the ESB (who the banks also use!), and at best that it's a grey area no regulator would touch with a barge pole. Given that it's such a huge area for consumers, I'd hope that this changes

This is just not true. Much as IFSRA may like to deny it, IFSRA does regulate IPSO. IPSO is just an aspect of the banks, the same as (say) Ark Life is an aspect of AIB, or premier banking is an aspect of the Bank of Ireland. IFSRA regulates anything to do with banking.

IPSO provides banking related services, ESB does not.

Also, IPSO is an arrangement between undertakings and could be subject to competition authority action too. IPSO can't legally just swing its weight around to the detriment of new market entrants or the consumer. (To be fair, in this case, IPSO claims it is doing the right thing.)

cgarvey

antoinolachtnai wrote:

This is just not true. Much as IFSRA may like to deny it, IFSRA does regulate IPSO.

Well both IFSRA and IPSO deny it, so what's your source to the contrary?

My ESB analogy was just that; an analogy. Take some other one like, say, an IT company that provides banking-related services. IPSO doesn't provide any banking/financial services, does it? It's just a central administrative body for services that the individual banks offer (like Laser/DD/etc.). So I could see the logic in them not being regulated by IFSRA.

Anyway, can you tell me why that is not true, so that I and others are better informed. I could also use your reference in my next conversation with IFSRA!

Sponge Bob

The IFSRA is another pretend or sham regulator a la Comreg.

Quis custodiet ipsos custodes ?

antoinolachtnai

First of all, in this instance, the issue is with AIB, not IPSO.

But to answer the question, the general principles stated in chapter 1 of the Consumer Code clearly relate to the activities of IPSO and to the issue being discussed. These provisions are very broad.

A regulated entity must ensure that in all its dealings with customers and within the context of its authorisation it:

1. acts honestly, fairly and professionally in the best interests of its customers and the integrity of the market;

2. acts with due skill, care and diligence in the best interests of its customers;

...

4. has and employs effectively the resources and procedures, systems and control checks that are necessary for compliance with this Code;

...

10. ensures that any outsourced activity complies with the requirements of this Code;

(see http://www.financialregulator.ie/industry/in_car_reqs.asp)

MOH

Sponge Bob wrote:

The IFSRA is another pretend or sham regulator a la Comreg.

Quis custodiet ipsos custodes ?

aha!

cgarvey

Agreed on your IPSO points Antoin, but you haven't addressed my request for clarification that I was telling mistruths!

antoinolachtnai

I certainly wasn't saying you were telling mistruths. Maybe my language was a bit boisterous and sorry if it was.

I don't doubt you when you say that both IPSO and IFSRA claim not to have anything to do with one another. But it is simply not true to say that IFSRA does not have a responsibility in relation to IPSO's activities. It does not matter who says it or how many times they say it.

ciaran00

I cancelled a DD with BOI and BT (yes i know there's another page for BT related complaints..) BOI acknowledged this as did BT. Then 2 monts later i was back on DD and monies were taken on 2 occasions, we cancelled twice. BOI fobbed us off with "Originator plus" brownstuff last august and we accepted it. Recently i started investigating it and it turns out what BOI said was totally wrong. I dunno bou you guys but i found IPSO were reasonably good. I got a great response and email with which i was able to go to the bank with. I'm meetign the bank manager on monday and hopefully will have resolution. My intentions are to take them to court. It has taken a year and a half of paperwork and evidence collection (sad it may sound but i got my teeth into this one...) They are obliged to write to BT (or whoever) with information that you've cancelled your DD with them, eventhough the mandate with BT was paperless/over the phone. You deserve to see evidence of this. If it's not forthcoming, you have rights under the data protection legislation - write to their data protection manager. i realise this thread hasn't been written about since 2007 but i'd be intrigued to hear what people are going through now.

dub45

ciaran00 wrote: »

I cancelled a DD with BOI and BT (yes i know there's another page for BT related complaints..) BOI acknowledged this as did BT. Then 2 monts later i was back on DD and monies were taken on 2 occasions, we cancelled twice. BOI fobbed us off with "Originator plus" brownstuff last august and we accepted it. Recently i started investigating it and it turns out what BOI said was totally wrong. I dunno bou you guys but i found IPSO were reasonably good. I got a great response and email with which i was able to go to the bank with. I'm meetign the bank manager on monday and hopefully will have resolution. My intentions are to take them to court. It has taken a year and a half of paperwork and evidence collection (sad it may sound but i got my teeth into this one...) They are obliged to write to BT (or whoever) with information that you've cancelled your DD with them, eventhough the mandate with BT was paperless/over the phone. You deserve to see evidence of this. If it's not forthcoming, you have rights under the data protection legislation - write to their data protection manager. i realise this thread hasn't been written about since 2007 but i'd be intrigued to hear what people are going through now.

It is great to see someone taking action on the direct debit mess. In my view it is a totally inadequate system and on top of that company staff and bank staff are simply not familiar with how it works. For example why is there no booklet available in branches to customers explaining exactly how the dd systime works? Why isnt such a booklet issued to everyone who takes out a direct debit.

I have found IPSO monunentally arrogant when I asked them some questions about the direct debit system. I wrote to them in April last asking what requirements are in place for the storage of customers banking information in companies participating in the dd sytem. I am still waiting on a reply!!!

As far as I can establish even though a direct debit may have been cancelled it is not possible for the bank to stop a reinstituded direct debit hitting an account. This is because a direct debit has not got a unique identifier like a cheque has. And also there is no central complaints facility in the systerm which means persisten offenders like BT are not picked up. IPSO are not a counsumer body their interests are the banks and companies and most people dont even know that they exist.

Your one question for the bank manager should be ''Why did they allow BT to steal money from your account on two occassions and then defend the practise''.

ciaran00

dub45 wrote: »

It is great to see someone taking action on the direct debit mess. In my view it is a totally inadequate system and on top of that company staff and bank staff are simply not familiar with how it works. For example why is there no booklet available in branches to customers explaining exactly how the dd systime works? Why isnt such a booklet issued to everyone who takes out a direct debit.

I have found IPSO monunentally arrogant when I asked them some questions about the direct debit system. I wrote to them in April last asking what requirements are in place for the storage of customers banking information in companies participating in the dd sytem. I am still waiting on a reply!!!

As far as I can establish even though a direct debit may have been cancelled it is not possible for the bank to stop a reinstituded direct debit hitting an account. This is because a direct debit has not got a unique identifier like a cheque has. And also there is no central complaints facility in the systerm which means persisten offenders like BT are not picked up. IPSO are not a counsumer body their interests are the banks and companies and most people dont even know that they exist.

Your one question for the bank manager should be ''Why did they allow BT to steal money from your account on two occassions and then defend the practise''.

I did ask that and was told that since the mandate is paperless, BT don't physically send them anything, the bank can't do anything. This goes against the rules set out by IPSO, who i realise is not regulated by the financial regulator however they do seem to make the rules that the rest should be working under. He actually told me that in order for BT to work in Ireland, they needed a spondoring bank. BT's sponsoring bank is AIB, he said he would use my case and go to AIB directly and show them how BT are abusing them and their services. However, banks being banks and back slapping being as popular as ever, nothing much may come of it.
The rep i talked with from the bank told me that it was difficult for the bank to offer protection to customers when dealing with paperless mandates. Monday shoudl be interesting. meanwhile i'm off looking for a very large mattress!

cgarvey

dub45 wrote: »

IPSO are not a counsumer body their interests are the banks and companies and most people dont even know that they exist.

That's it. in one.

It's time for a very clear Direct Debit scheme with very clear rules for all 3 parties. Originator Plus businesses should be forced to provide proof of authorisation, on demand. The guarantee must be enforced (with clear penalties for both consumer and originator if they abuse it). It's very easy to come up with a set of plain-English guidelines that all parties can follow.

IPSO have the ideal oppertunity to provide a simple interface to this (so consumers can see all their DDs, automate cancellation notices, and track abuses, etc.). They have the oppertunity to come up with a clear system that is favourable (rather than being forced on consumers, even with financial penalties now), and they can do that with minimum expense.

Will they? Perhaps the answer lies within their source of income.

cgarvey

ciaran00 wrote: »

My intentions are to take them to court. It has taken a year and a half of paperwork and evidence collection (sad it may sound but i got my teeth into this one...)

Good man, and good luck! From where I'm sitting you have a legal case against the bank (on grounds of neglegence) and BT (on grounds of deducting monies and establishing Direct Debit contracts without your authorisation), but the details in your case might not be that simple. At least you're standing up to the nonsense!

dub45

ciaran00 wrote: »

I did ask that and was told that since the mandate is paperless, BT don't physically send them anything, the bank can't do anything.

That is absurd beyond words! If the bank cannot do anything they should not be operating the dd scheme plain and simple. How can internal audit allow such a scheme to operate if the bank are so powerless.

Please ask at your meeting how the banks internal audit and security specialists can stand over the operation of a system that leaves them so powerless.

ciaran00 wrote: »

This goes against the rules set out by IPSO, who i realise is not regulated by the financial regulator however they do seem to make the rules that the rest should be working under. He actually told me that in order for BT to work in Ireland, they needed a spondoring bank. BT's sponsoring bank is AIB, he said he would use my case and go to AIB directly and show them how BT are abusing them and their services. However, banks being banks and back slapping being as popular as ever, nothing much may come of it.

BT and any company for that matter require a sponsoring bank to participate in the direct debit scheme. As you say the only way to complain is to your own bank first and hope that they will bother to complain to the sponsoring bank who of course have a commercial relationship with the offender. There is a need for an independent complaints 'body' so that persistent offenders such as bt will be nabbed. There is no sanction open to the payer against a company who messes them around and this is why the companies operate with such gay abandon they know that no matter what they do there is no sanction against them.

ciaran00 wrote: »

The rep i talked with from the bank told me that it was difficult for the bank to offer protection to customers when dealing with paperless mandates. Monday shoudl be interesting. meanwhile i'm off looking for a very large mattress!

Again if that is the case why are they operating the system? The banks signed up to the system so surely in advance of any sign up they examined the weaknesses of it. The paperless mandate should never have been allowed/ Please also ask your 'friend' on Monday what training staff are given in the direct debit scheme.:)

Incidentally has anyone got a copy of the uk scheme?

dub45

cgarvey wrote: »

That's it. in one.

It's time for a very clear Direct Debit scheme with very clear rules for all 3 parties. Originator Plus businesses should be forced to provide proof of authorisation, on demand. The guarantee must be enforced (with clear penalties for both consumer and originator if they abuse it). It's very easy to come up with a set of plain-English guidelines that all parties can follow.

IPSO have the ideal oppertunity to provide a simple interface to this (so consumers can see all their DDs, automate cancellation notices, and track abuses, etc.). They have the oppertunity to come up with a clear system that is favourable (rather than being forced on consumers, even with financial penalties now), and they can do that with minimum expense.

Will they? Perhaps the answer lies within their source of income.

There appears to me to be no will to take into account the concerns of the consumer. They rely on consumer apathy and know that few people have the energy to really pursue issues and even to try to come to grips with how the scheme works.

For example has anyone noticed how the '14 days notice' has now for a lot of companies become 14 days from the date on the bill? With business envelopes no longer postmarked it is impossible to know when a letter is actually posted and companies can and do print any date they want to on a bill. I tried to raise this with IPSO and the guy I spoke to was openly contemptuous towards me. I pointed out to him repeatedly that the scheme was being broken and he kept saying ok I will tell o2 (who were the offending party in my case) that I have receive ONE complaint and kept emphasising the ONE part of it. He also kept telling me that he was prepared to accept very short notice for his own debits.

By the way in the case of direct debit plus the originator is only requered to give 7 days notice which is an absolute nonsense. One of the purposes of the notice period is to allow a customer to query or dispute a bill and disputed amounts are not supposed to be debited. I leave the rest up to yourselves!

foggy_lad

a quarantor for a loan and most other banking procedures are liable to charges or debits for a period of 6 months from the final payment or closure of account etc afaik
maybe this is what the person in the AIB is referring to when saying the op's DD may be reinstated in the future?

dub45

foggy_lad wrote: »

a quarantor for a loan and most other banking procedures are liable to charges or debits for a period of 6 months from the final payment or closure of account etc afaik
maybe this is what the person in the AIB is referring to when saying the op's DD may be reinstated in the future?

There is absolutely no provision for the reinstatement of a dd in the scheme afaik. To go back to basics. A dd is simply a method of paying a bill which the bank facilitates at the request and with the permission of the account holder.

The account holder's wishes (and instructions) must be supreme in this case and no one else's. The security of the customers account should be paramount to the bank.

The relationship between the business concerned and the customer should be of absolutely no relevance to the bank.

To put it another way suppose you paid your monthly bill to someone by posting a cheque to them or perhaps through the bill pay facility of an post. If you decide to change your method of payment that would be irrelevant to an post and so it should be irrelevant to the bank other than you follow the correct procedure.

As I have pointed out (to the point of driving people mad I am sure:)) there is a major flaw in the banking system in that they cannot afaik stop a dd hitting the system. If they could there would be no way a dd could be reinstated.

Every dd when it is set up should have a unique numeric identifier and this is what the banks should use to stop it when it has been cancelled.

Also when a dd is cancelled all banking data should have to be immediately removed from the company's computer systems and any other records they have should be destroyed. There is no requirement for this in the scheme.

To reinstate a dd without the customers knowledge and to use it to get money from an account is theft. And for a bank to facilitate this theft is mindboggling.

I cannot understand how the dd system in its present state is allowed to be operated by the banks' security departments and I wonder who actually has to sign off on it on the part of the banks.

faceman

dub45 wrote: »

The main trouble (and there are many) with direct debits is that each agreement is not numbered so therefore cannot be stopped like a cheque. A company so long as it has your bank account details can keep presenting a direct debit on your account until the cows come home. The bank has no way of detecting a deduction as it comes in for presentation.

Thats not correct. The bank are spouting rubbish. Each retailer who utilises the DD scheme has a unique originator ID which the bank use to verify they are who they say they are. They can stop that particular originator from debiting your account if need be.

OP, its sounds like there is alot of information being bandied about here that may not be necessary yet.

There are 2 types of direct debit scheme. The one that seems to cause most of the problems on boards is what's called Originator Plus (OP)

OP works on a basis of trust. The Originator (e.g. your phone provider etc) can take your bank details over the phone, doesnt need your signature but has a specific process to follow to confirm with you, the customer, that a DD has been set up for your customer account.

The bank can debit money from your bank account without a signed copy of a DD mandate (as with the old scheme) on the "trust" that the originator has followed the correct process.

If you want to cancel a DD regardless of what retailers or some Customer Service people with a bank say, you must do 2 things. Cancel with both the bank and the service provider in writing. It doesnt matter if you still owe money to the originator or not, you have the right to cancel the DD at any stage.

The bank can prevent further transactions by the originator being carried out on your account. If a transaction goes through, the bank must refund you and chase the originator for the relevent reimbursement themselves. Regardless of whether the originator refunds the bank should not impact the bank refunding you.

If you find that the originator or the bank is not cooperating despite your written notice, then you contact IPSO as your first point of contact. Supply them with copy of cancellation letters, contracts etc.

In the unlikely event that IPSO doesnt help then you can contact Consumer Affairs etc.

Despite what some people are saying here, I have found IPSO to be a very helpful organisation to both consumers and retailers.

dub45

faceman wrote: »

Thats not correct. The bank are spouting rubbish. Each retailer who utilises the DD scheme has a unique originator ID which the bank use to verify they are who they say they are. They can stop that particular originator from debiting your account if need be.

I have confirmed with people working in the bank that they cannot stop direct debits. And if they can as you claim then why are reinstituted dds, who after all come from that originator that you claim can be identified, paid?

And what about a situation where you have may have two direct debits with the one originator how is the bank to distinguish between those?

faceman wrote: »

OP, its sounds like there is alot of information being bandied about here that may not be necessary yet.

There are 2 types of direct debit scheme. The one that seems to cause most of the problems on boards is what's called Originator Plus (OP)

OP works on a basis of trust. The Originator (e.g. your phone provider etc) can take your bank details over the phone, doesnt need your signature but has a specific process to follow to confirm with you, the customer, that a DD has been set up for your customer account.

The bank can debit money from your bank account without a signed copy of a DD mandate (as with the old scheme) on the "trust" that the originator has followed the correct process.

If you want to cancel a DD regardless of what retailers or some Customer Service people with a bank say, you must do 2 things. Cancel with both the bank and the service provider in writing. It doesnt matter if you still owe money to the originator or not, you have the right to cancel the DD at any stage.

That is not correct - it may be the wise thing to so but the direct debit scheme only requires you to cancel with your bank

In the event that the Payer wishes to amend or cancel a DDI or DDI+, the Payer shall duly notify in writing his Paying Bank (and should also as a matter of good practice notify the relevant Originator)

The onus is on the bank to inform the company involved.

faceman wrote: »

The bank can prevent further transactions by the originator being carried out on your account. If a transaction goes through, the bank must refund you and chase the originator for the relevent reimbursement themselves. Regardless of whether the originator refunds the bank should not impact the bank refunding you.

It is not correct to say that the bank 'must' refund you. The direct debit guide states:

If it is established that an unauthorised Direct Debit was charged to your account, you are guaranteed a prompt refund by your Bank of the amount so charged.

So it has to be 'established' before a refund can be made. There is no definition of what 'established' means and there is no procedure laid down for the payer to follow if his bank do not accept his/her claim. Bear in mind too that bank employees do not appear to be over familiar with the details of the scheme to put it kindly. Perfect example of the bank refusing to refund:
http://www.boards.ie/vbulletin/showpost.php?p=56388393&postcount=38

faceman wrote: »

If you find that the originator or the bank is not cooperating despite your written notice, then you contact IPSO as your first point of contact. Supply them with copy of cancellation letters, contracts etc.

In the unlikely event that IPSO doesn't help then you can contact Consumer Affairs etc.

Despite what some people are saying here, I have found IPSO to be a very helpful organisation to both consumers and retailers.

With all due respects to you this is nonsense. There is no formal role for IPSO in the direct debit scheme. Find me a mention of them anywhere?

And this is one of the huge weaknesses of the scheme there is no proper complaints procedure for the payer whatsoever. Most people don't even know of IPSO's existence and it is in the absence of a proper complaints procedure that people contact them in desperation. IPSO are an industry body and the interests of payers come a very poor third after those of the companies and the banks. The way BT have been allowed for years to mess around with peoples accounts is proof of that.

Wny isn't everyone who signs up for the dd scheme issued with a guide with particular reference to the proper way of cancelling and how to make a complaint? I doubt if you will find IPSO taking on that role anytime soon!!

Does anyone know of a guide to the dd scheme for customers other than on the IPSO site?

The only party to the dd scheme who is ever sanctioned for breaking it is the payer. If your money is not in your account on the due date the bank penalises you and in many cases companies impose their own additional charges which are not advised to the payer when they are signing up for the direct debit.

Our so called incredibly helpful friends in IPSO do not want to know about these hidden charges of course!!! Yet if companies break it there is no sanction - if the banks break it there is no sanction. Missing a direct debit payment can cost upwards of 25 euros.

Reinstitute a direct debit without warning - no sanction.

Pay the reinstuteded direct debit no sanction.

I wrote to the IPSO Chief Executive last April asking various questions about requirements for the security of information held by companies. It took a registered letter and the threat of writing to the papers to get a (very inadequate) response!

faceman

Ok here we go again!

dub45 wrote: »

I have confirmed with people working in the bank that they cannot stop direct debits.

That doesnt make sense. Then why do retailers received notifications for cancelled direct debits from the bank when they try debit account where a DD has been cancelled? Granted different banks have different processes (AIB seems to be best organised in that area)

wrote:

And if they can as you claim then why are reinstituted dds, who after all come from that originator that you claim can be identified, paid?

I can explain how and why that happens but it wont make sense to the general readers here. its to do with coding on the electronic file that is presented to the bank by the originator. PM me if you really want to know and I will explain.

wrote:

And what about a situation where you have may have two direct debits with the one originator how is the bank to distinguish between those?

You cant. Point taken. However how common an occurence is it tho?

wrote:

That is not correct - it may be the wise thing to so but the direct debit scheme only requires you to cancel with your bank

Thats true, point taken. However it is best practise.

wrote:

It is not correct to say that the bank 'must' refund you. The direct debit guide states:

So it has to be 'established' before a refund can be made. There is no definition of what 'established' means and there is no procedure laid down for the payer to follow if his bank do not accept his/her claim. Bear in mind too that bank employees do not appear to be over familiar with the details of the scheme to put it kindly. Perfect example of the bank refusing to refund:
http://www.boards.ie/vbulletin/showpost.php?p=56388393&postcount=38

Proof of cancellation is all that's required. (i.e. copy of the letter etc) Its not rocket science in fairness. An individual either cancelled or they didnt. Its detailed in Section 2 of the Direct Debit scheme rules by way of a table which outlines what is required.

wrote:

With all due respects to you this is nonsense. There is no formal role for IPSO in the direct debit scheme. Find me a mention of them anywhere?

Strictly speaking the process owners are Irish Retail Electronic Payments Clearing Company who are owned by IPSO. google direct debit scheme in ireland and IPSO pops up so i dont know what you mean your comment. If it is a disputes procedure then yes, there aint any! Granted there is very little transparency for consumers up front that advises them where to complain. Although should the process work correctly, the consumer would never need to go beyond their own bank to resolve an issue.

wrote:

And this is one of the huge weaknesses of the scheme there is no proper complaints procedure for the payer whatsoever. Most people don't even know of IPSO's existence and it is in the absence of a proper complaints procedure that people contact them in desperation. IPSO are an industry body and the interests of payers come a very poor third after those of the companies and the banks. The way BT have been allowed for years to mess around with peoples accounts is proof of that.

Wny isn't everyone who signs up for the dd scheme issued with a guide with particular reference to the proper way of cancelling and how to make a complaint? I doubt if you will find IPSO taking on that role anytime soon!!

Dont disagree with your point here.

dub45

Your arguments and defense of the dd system become more porous each time you post.

faceman wrote: »

Ok here we go again!

That doesnt make sense. Then why do retailers received notifications for cancelled direct debits from the bank when they try debit account where a DD has been cancelled? Granted different banks have different processes (AIB seems to be best organised in that area)

It should not be a matter of the banks having different processes. Having a dd rejected should not be a lottery. The fact is that you cannot be guaranteed that a dd will not be paid. Incidentally why are these retailers issuing the dds in the first place if they have been cancelled:0

faceman wrote: »

I can explain how and why that happens but it wont make sense to the general readers here. its to do with coding on the electronic file that is presented to the bank by the originator. PM me if you really want to know and I will explain.

If it can happen then the system is wrong - plain and simple. Electronic coding or whatever may be the excuse it is plain and simply wrong and once again should not be acceptable in a proper system.

faceman wrote: »

You cant. Point taken. However how common an occurence is it tho?

How common it is does not matter again it bears out my point. Each dd agreement should have a unique identifier and in that way could be blocked like a cancelled cheque.

faceman wrote: »

Proof of cancellation is all that's required. (i.e. copy of the letter etc) Its not rocket science in fairness. An individual either cancelled or they didnt. Its detailed in Section 2 of the Direct Debit scheme rules by way of a table which outlines what is required.

You are conveniently forgetting that not all deductions that a customer might be disputing are related to cancelled direct debits. For example many companies do not honour the notice period - when I joined Smart first they were debiting my account (and others) before the actual bills were received.

Our good friends in BT were well known at one stage for not billing people for months and then hitting their accounts without any notice for the full amounts outstanding. They are examples of where the customer should be entitled to request a charge back.
Also there is no provision in the scheme for a payer to be compensated in a case where a dd is wrongly paid out for whatever reason and causes him say to go into overdraft or have other dds rejected. Who does the payer approach about such situations?

faceman wrote: »

Strictly speaking the process owners are Irish Retail Electronic Payments Clearing Company who are owned by IPSO. google direct debit scheme in ireland and IPSO pops up so i dont know what you mean your comment. If it is a disputes procedure then yes, there aint any!

There is no proper complaints procedure - there is no dispute procedure of any description. There is no mention of a role for ipso in the direct debit scheme. Thats my comment I cannot understand what you do not understand about it? If the dd system was proper system it would not involve ''googling for direct debit scheme in Ireland''

IPSO get involved out of the 'goodness' of their heart and embarrassment at the behaviour of their clients. There is nothing to prevent them telling someone who rings them with a complaint to hump off. There is no formal requirement for them in the direct debit scheme to do anything for someone who is complaining.

Complaining to IPSO who after all are dependent on the companies and the banks is like a prisoner complaining to a prison governor
about the behaviour of the prison guards.

faceman wrote: »

Granted there is very little transparency for consumers up front that advises them where to complain. Although should the process work correctly, the consumer would never need to go beyond their own bank to resolve an issue.

There is no transparency anywhere up front behind or anywhere else. And who is responsible for this? IPSO and their clients. After all the scheme did not magically appear out of thin air.

The point is that the process does not work correctly. And even the best process will have failings from time to time - but properly thought out procedures would take care of these failings.

We have the worst of all possible worlds - a badly thought out scheme with lousy protection and concern for the consumer.

As i keep pointing out the only one who is actually sanctioned in the scheme is the consumer when they miss a payment - the banks and the companies can effectively do what they want. IPSO are hardly going to pursue a big company like BT and have the dd facility withdrawn from them no matter what they do.

foggy_lad

what about this senario then- you have a DD with company A and you decide because they are no good or your contract is up or for whatever reason you want to cancel your DD so you write to company A telling them you are doing so and your bank who then cancel your DD for company A.

then after a while some unscruples person within company A who wants to boost his/her sign-up rate for that month or company A's owner wanting to line his/her pocket re-activates your DD by actually setting up a completly new DD using details you have given for the old DD.

this may explain difficulties when then getting this DD cancelled or refunded as it may have a different originater number?

could companies actuall do this?