Direct debit set up

Fiery mutant

Not sure if this is the right place for this, so mods please move if need be.

I recently discover that a direct debit had been set up on one of my bank accounts, which had not been authorized by me. What's more, the direct debit appears to have someone else's name on it. When I called my bank to query this, I was told that essentially it wasn't their problem, and to contact the other bank involved in the debit.

When I called the other bank, they said it would be investigated and they would get back to me. That was nearly a week ago. I know mistakes can happen, but I'm at a loss to explain how a finance using a direct debit mandate can be approved if bank account details and name of the. Person applying do not correlate.

I work in retail and people applying for finance in my store need a photo id and proof of address. The finance company then does a credit check, and approved or not. Surely this would show up at the time, that the name and bank account details don't match. We would often pick up on fraudulent applications.

Am i missing something simple here?

L1011

Under SEPA rules you can block and recall the direct debit(s) that have gone out - the bank has to do this. The security issue is separate and serious enough but you need to make sure this happens first.

Fiery mutant

The debit didn't go through as I didn't have only in the account to cover it. My salary gets paid into this account. I leave enough in it to cover bills, transfer the remainder into a separate account. So though the payment didn't go through, I did get hit with the charge for an unpaid direct debit.

The debit itself has been cancelled, but it's the security aspect of it that has my back up. When I spoke with the bank that put the finance through, I was told I would get contact back in a day, and I told them I have questions that need to be answered.

That was last Wednesday, haven't heard anything from them since.

stronglikebull

Make a formal complaint to the bank in question first, and if you don't get a satisfactory answer then you can escalate it to the financial services ombudsman
http://www.citizensinformation.ie/en/consumer_affairs/financial_services/financial_products/financial_regulator.html

You should also get a refund from your bank for the failed direct debit charge, as this was not an authorised DD by you. If you don't, then again go through the formal complaint process, etc.

dudara

Moved to Banking & Insurance & Pensions

dudara

BazzaDP

Direct Debits are incredibly easy to set up. All you need is the IBAN.

There was a famous story where Jeremy Clarkson thought people were overly worried about privacy and published his bank details and said "do your worst" and soon discovered how wrong he was to do that as someone set up a charity direct debit using those details: http://news.bbc.co.uk/2/hi/7174760.stm

Is this a "security issue"? Arguably. Of course no one wants monies taken out of their account incorrectly, but the consumer protections for incorrect direct debits are very strong. You can request for a "no questions asked refund" within 8 weeks of a direct debit and the banks must comply. Additionally within 13 months you can ask for a refund for any unauthorised direct debit (though legislation is unclear as to how "unauthorised" is defined or proven). In both cases the direct debit is taken immediately out of the bank account the direct debit was paid to (even if it makes them overdrawn) and back into your account. Additionally you can blacklist a company from setting up future direct debits against your account if you have any issues.

So usually the bank of the company the direct debit is paid to is quite strict on who can set up a direct debit (as they could end up losing money here) so won't allow just anyone to become a direct debit instructor.

Applying for credit is different. You are getting money from someone, and without the protections for them mentioned above, for them to get it back if you decide to stop paying, so of course they're going to be a bit more careful with that.

Name checking is actually quite a bit harder than it sounds, with common misspellings, Irish names, business account names, joint accounts... etc. So it's quite manual. Fine for lodging a cheque, or signing off credit, were a real person rather than a computer can step in, but a bit unwieldy for other things.

So why do they make it so easy to set up a direct debit? Convenience really. Fraud is quite low (since not just anyone can become a direct debit instructor), consumer protections are quite strong, and direct debits are very common. Some people will be shocked it's so easy, and hate the fact it's so easy, but personally I think they've struck the right balance and would not like setting up of direct debits to be painful. TV licence for example insists on paper forms being filled in, and think they used to ask for a bank statement too, all of which means it was too much hassle for me to bother setting it up - their loss as they have to chase me for payment and a once a year, and an annoyance for me.

Of course, as with anything in life, sometimes things will go wrong. Typos will be made, which is the most likely explanation for your case and sometimes a direct debit will be set up on wrong account. Yes it's an inconvience for you when it happens, but usually it's pretty simple to fix, and would expect both banks and the company to be pretty good about sorting it out quickly (surprised your bank basically washed its hands of the situation to be honest).

Hope that helps explain the situation.

Donal55

Fiery mutant wrote: »

Not sure if this is the right place for this, so mods please move if need be.

I recently discover that a direct debit had been set up on one of my bank accounts, which had not been authorized by me. What's more, the direct debit appears to have someone else's name on it. When I called my bank to query this, I was told that essentially it wasn't their problem, and to contact the other bank involved in the debit.

When I called the other bank, they said it would be investigated and they would get back to me. That was nearly a week ago. I know mistakes can happen, but I'm at a loss to explain how a finance using a direct debit mandate can be approved if bank account details and name of the. Person applying do not correlate.

I work in retail and people applying for finance in my store need a photo id and proof of address. The finance company then does a credit check, and approved or not. Surely this would show up at the time, that the name and bank account details don't match. We would often pick up on fraudulent applications.

Am i missing something simple here?

PM sent.

Donal55

Donal55 wrote: »

PM sent.

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