Unlawful Direct Debits?

[killing_the_egg]

Egg have set up direct debits again on my bank account after I have cancelled them. This has happened a number of times over the last 5 years but every time i complained i got told by the bank to go to Egg and Egg told me it was in my contract that I had to have a direct debit. Surely that doesnt give them permission to just go raiding my bank account.

The last time this happened was when I rang them to tell them I could not afford to pay them anymore and that I was in contact with the credit councelling agency about the problem. Even though no direct debits were set up on my account at that time they used my bank details they obviously had on file and tried to take different amounts of money on, once each day for three days. I was not notified about the DD, the change of amount or the change of frequency of the DD. They, however said I set it up. Bo**cks!

Anyway, my question is, I arent sure about the exact dates these dds have been set up without my permission. Because they are done electronically I have no way of knowing which i set up and which i did not. Does the bank have any obligation to find this out for me? What proof could they offer me that I did set them up other than eggs say so, unless they recorded the phone calls and kept them on file. And, if so how can i get this information.

I have sent dpas to my bank and egg asking for all dd info but dont know if i will get any.

If anyone has any information on this i would be extremely grateful because bank charges just due to the last 3 definately unlawful dds have taken me over £100 overdrawn on a account without an overdraft but i am refusing to pay until i have sorted it out. Cheers, Martin:)

[callumsgran]

First of all if you have cancelled a dd they are not allowed to reset it up without your permission and signature! if you wrote to them to cancel it then they shouldn't be using previous details! secondly do you have online banking ? if so you can check everyday to see if they have set up a new instruction and cancel it online if your bank allows this!

[killing_the_egg]

Big companies have an agreement with banks and do not need a signature, they can set up DDs electronically. I, like you, assumed the bank needed a mandate and a signature but this is not the case. Check out my 'Martin vs. Halifax' thread for more background on this if your interested. Its bloody shockin. Cheers for your post.

[callumsgran]

That is outrageous! ive never heard that before, it shouldn't be allowed!!! i was under the impression nobody could be forced to pay anything by dd:mad: i suggest you get another account and close that one down!!! would that work?

[killing_the_egg]

Ive been put overdrawn due to these unlawful dds when i dont have an overdraft. If your interested in the rules for dds have a look at this website : Direct Debit - Direct Credit It tells you about the 'special' rules for businesses.

There is such a thing as the direct debit guarantee saying if they have made a mistake the bank will withdraw all charges within 24 hours i believe, but how do i prove they have made a mistake? Does the bank have to show me they havent? Or do they just take the company who set up the dd's word for it? I believe this last one to be the case but maybe sum1 out there has more knowledge of the system than I.

[callumsgran]

As far as i know you cant claim this if they didn't pay it out i.e they bounced it because of no funds in account, is that what they done?

[callumsgran]

Hey your link was interesting! seems the local authorities are up for awards if they can get people to sign up for dd's!!!! my OH was blackmailed into signing up for one for our council tax, crafty bas****s:mad:

[killing_the_egg]

I have just rang the Halifax and spoken to them about some of the issues I had regarding direct debits.

I cant believe what I have just heard.

I asked what proof the bank asks of a big company to check that a direct debit has been authorised. I was told "we just take their word for it" quote.

I was told the Halifax notify the customer every time a dd is set up. This is not true, I have never recieved a notification from my bank that a dd has been set up.

I was also told that if a big company is owed money by yourself and has your bank details they can set up a dd on your bank account without your permission.

This was said by a Paul Mcknight, a manger at a halifax call centre.

This is outrageous. DD's are meant to be safe. Any big company with your bank details on file can withdraw money from your bank account without any questions being asked.

As always I am wary of any info given to me by my bank so if anyone has anything they can add to this I would be most grateful.

[david Reed]

OK off topic a little but my sister was in tears recently when a gas company took £300 pounds from her account, this was after a signed agreement saying she could pay off these payments in installments. The say this was done because she gets her Gas from a different customer now and therefore all bills had to be setled, but all she did was change to a key meter as pre arranged?? this has left my sister and her husband and 2 children with no food money for this whole month, its ridiculous surely...can anyone advise? thankyou in advance x

[lee6370]

If you contact the bank and tell them the money was taken by a direct debit you didn't set up they should, put the money back in your account.

 

As far as i know they have to take your word for it and it's down to the gas company to prove otherwise.

[killing_the_egg]

If anyone has any propper knowledge of how these systems work and how we can sort out our problems they would be gratefully recieved. I have not found any other posts on this site dealing with this issue, surely somenone must have discussed or brought up this topic before.

[lookinforinfo]

Quote= asked what proof the bank asks of a big company to check that a direct debit has been authorised. I was told "we just take their word for it"=unquote.

 

Banks do allow a small number of highly reputable companies to raise direct debits,

usually over the phone, withiut the need for the customers signature. This is a

greatly coveted facility. If a bank was informed that a company was abusing the

facility by raising a d/d without the permission of the customer, and especially

should it involve the bank refunding the customer, then the withdrawal of that

facility to the company would I imagine, be pretty swift.

 

You will need to talk to your bank first, preferably your account manager or higher-

don't waste your time with call centre staff. What you need to know is under what

circumstances companies like Egg can raise d/ds without a signature.[eg can it

only be done over the phone :does Egg have that facility]. And once a d/d has

been cancelled by you, can Egg resurrect that D/d without your permission?

 

The obvious answer is no. Once you have got the answers from your bank, don't

expect too much help from them thereafter-they will be scared that they will have

to reimburse not only your bank charges, but also the unlawful direct debits, as

well as calling into question the whole question of accepting d/ds without signing.

 

So it will be you in charge of the cruise missiles aimed at Egg

[lookinforinfo]

Tell your bank that as they are incapable of acting on your behalf against Egg,

you are left with no alternative than to transfer your account to another bank

where Egg cannot then levy d/ds, and see if that will galvanise your bank to resolve the situatiion. They may suggest that you open a new account with them and close your present one. Either way, you get Egg out of your hair.

[blueskies]

You cannot set up a direct debit with your bank, it has to be through the payee. Therefore unless you told Egg to set it up again then all direct debits are unlawfully set up.

 

The direct debit guarantee says that any wrong charges taken from your account will be refunded by the bank (they can then reclaim from the company).

 

This definately falls within the realms of criminal law, but, as we all know, hell will freeze over before a bank will appear in a criminal court in a case of theft from an individual customer.

[lookinforinfo]

Errr- you.re not quite there Blueskies. What is happening is that when Killing

cancels the d/d to Egg, they more or less immediately reinstate it as it is in their

T&C's that the customer has to have a d/d. By reinstating the d/d themselves

without the permission of the customer, notwithstanding their T&C's is verging

on fraud I would have thought.

 

But until Killing speaks to the bank for their take on the situation, stressing that

it is Egg reinstating the d/d that is causing the problem, since not knowing when

the d/d is going through, or for how much, is the cause of the account going awry.

 

The bank will not refund the d/d nor the charges since Egg insists that there is

no mistake because the customer did give permission to apply a d/d. Maybe not

recently, they are falling back on Killing agreeing when setting up the account to

maintain a d/d. so no matter how often the d/d is cancelled, Egg set up a new one.

 

Now I know from my own experience that a bank will cancel every d/d I have, except if I have a loan account-and that d/d they will not cancel-they ignore my

instructions for that. But the situation with Egg, while they have a similar

situation to my bank in that they want to receive regular payments to their

account, reinstating a cancelled d/d is a completely different ball game. especially

insisting that it is done with the customers permission.

 

 

I don't know why Killing has not already written to his bank explaining the situation,

and warning them that if they do nothing, they could be involved in aiding and abetting fraudulent transactions.

 

If they are doing this with one person, it is not unreasonable to assume they are doing it with others also. I just don't understand how they can get away with it.

[blueskies]

I'm not certain but I think a direct debit mandate only lasts 6 months from date of signature. It as to be set up by then or they need a new signature, regardless of whether there is a contract term saying you must have one. No company can remove funds from your bank account without your direct permission unless they have a court order. Once you have removed authority they cannot reinstate it, to do so would be theft.

[killing_the_egg]

Thanks for your help everyone!

If anyone has any idea of what to include in a letter to my bank about this it would be appreciated.

I'm interested to hear what would happen if Egg or my bank could not prove 100% that any of the DDs have been set up legally. Hopefully it is up to them to prove thay are legal as a pose to me proving they aren't. Also, if anyone knows anything else about the 6months rule blueskies talk about.

I'll start to draft a letter tonight and let you know how i get on.

[lookinforinfo]

I have had quite a few d/d's running for much longer than 6 months [mortgage,

electriity, phone] without having had to reconfirm them. However if you are talking

about unsigned d/ds established over the phone, then I don't know.

 

Something like this to your bank?

 

Dear Sirs,

When I opened my account with Egg, it was part of the agreement that I maintain

a direct debit to effect payment. Since then, on several occasions I have asked

you to cancel their direct debit, and you have done so.

 

However, on each occasion, Egg have reinstated their direct debit WITHOUT

MY PERMISSION. To date, you have washed your hands of this affair. I believe

that as Egg expect me to adhere to their original rule of always maintaining a

direct debit,it entitles them to do this and furthermore they think that this rule

enables them to claim that they have my permission.

 

You will be aware that to raise a direct debit without the customers consent is

theft and puts them in breach of direct debit regulations. You will also be aware

that for you to continue to pay these unlawful demands makes you an accessory.

I look forward to your reply and would like confirmation that you will not honour

any further direct debits from Egg.

 

Yours etc etc

 

If you have a mind, you could send copies of the letter to the FSA, Information Commissioners Office and OFT.

In which case, you could add a PS to your letter advising the bank of your action,

further reinforcing the need for them to act this time.

 

With that letter Killing, I have made no reference to you having to bear the burden of proof that you did not agree to any mandates to Egg after the first one. Your

letter, especially if you choose to send copies to any or all of the other bodies

is sufficient in itself.

 

Blueskies-I am sure I am right in including the bank as an accessory?

[DiddyMac]

Wow this is uncanny. I recently received a letter from my bank saying I was being charged £39 as a DD to Egg wasn't paid. I am about 99% sure I did not instruct Egg to set up the DD. Anyway I log into my Egg loan account(I haven't done this for 2 plus years as my credit card was converted into a loan) and find out I have a positive balance of nearly £200, for over 2 years and Egg didn't bother telling me about it. These banks are jokers. Makes me determined to pursue them for at leats £6k in bank charges they owe me

[killing_the_egg]

As no-one seems to have any specific knowledge of the direct debit systems in place in banks and building societys (including the people who work in them) I have drafted a letter to the Halifax to ask them to clarify some issues for me. If anyone has any thoughts on how this letter could be changed or has any answers to the questions raised in this thread I would be most grateful.

 

Halifax,

Trinity Road,

Halifax,

West Yorkshire,

HX1 2RG

31st July 2006

Request For Information

 

Account Number: *********

Dear Sir/Madam

After consultation with my branch I would be grateful if you could clarify the Halifax’s position regarding the taking of direct debits’ from customers accounts. If it is possible could you please supply me with details of your direct debit procedures. In particular I am interested in the following:

What proof you ask of companies requesting direct debits;

What records of direct debit authorisation the Halifax keeps on file;

Halifax’s’ procedures relating to changes in direct debit dates and amounts, in particular customer notification issues;

Rules relating to the lengths of time a direct debit can run on any one account;

What your procedures are regarding direct debit complaints from customers and;

Halifax’s interpretation of the direct debit guarantee.

As a Halifax customer I have been given conflicting information regarding this matter both off different people in the same Halifax branch and also from various people in Halifax call centres. A clarification of this matter in writing would be most grateful.

Yours Faithfully,

[Killing_the_egg]

[Andy999]

The Direct Debit Guarantee says that you can cancel a Direct Debit at any time by writing to your bank. I would suggest you send a letter (or similar) to the head office complaints department of your bank, reminding them of their obligations under this guarantee. Some (but not all) banks have the facility to "block" an originator from setting up new DDs on an account. If your bank has this facility then they should offer it to you. If Egg do take any payments from your account, then you should ask your bank (not Egg) for a full and immediate refund - also part of the DD Guarantee.

 

It doesn't matter what your contract with Egg says about DDs. Your contract with the bank says they will abide by the DD Guarantee scheme. As a customer you are the only person who can authorise DDs, and you can cancel them at any time. If your bank fail to help you then ask for a letter of deadlock and contact the Financial Ombudsman Service.

[lookinforinfo]

The problem is Andy that the banks are only obliged to make "full and immediate

refunds" when an error occurs. As Egg maintain no error has occurred, their is

no obligation for the bank to act.

However it also states in the direct debit guarantee statement that in the event of a company changing the date or the amount of the d/d, they must inform their

customer in advance. As I understand it, Egg are changing the date of collection

without notification, which constitutes an error that the bank should react to.

 

Have a read of the following url for more light on the situation. I imagine these cases

probably take months to resolve. But the way I read it, if you have claimed the monies back from the bank, and they have refused, then they may well have to

reimburse you now. In addition, should you have suffered any bank charges as a result of changing the dates without notification, the Ombudsman will put

pressure on Egg to reimburse you.

 

issue 27 - banking - direct debit guarantee

[pchan1]

I have the same situation with nationwide bank

[the banker]

Guys,

 

A Direct Debit is your authority to your bank for somebody (called an "originator") to withdraw funds from your account, provided they tell you in good time how much they will take and when they will take it (called Advance Notice).

Funds cannot be taken from your account by an originator unless they hold a valid Direct Debit Instruction

 

Disputes about payments

If you dispute one or more payments that have been taken from your account you should contact your branch. There are nine independent criteria that the bank can use to uphold your complaint:

a) the amount and/or the date of the Direct Debit differ from the Advance Notice issued by the originator (a Direct Debit has to be claimed within three days of the date notified, it cannot be taken early)

b) No Advance Notice was received, or the amount quoted is disputed by the Payer

c) DDI Cancellation by the Paying Bank - where there is proof that a cancellation advice has been sent by the Paying Bank to the originator on or before the debiting day.

d) Where you have cancelled the DDI direct with the originator, notwithstanding the fact that you may not have cancelled the DDI with the Bank

e) No Instruction is held

f) The signature on the DDI is fraudulent or not in accordance with the account authorised signature(s) held by the Paying bank.

g) Indemnity Claim at the originator's request

h) originator name disputed

i) Consequential Loss

 

The Direct Debit Scheme rules say that the Paying Bank will accept the word of its customer and should refund the disputed amount whilst the complaint is investigated.

 

If you write to your bank to cancel a Direct Debit, it cannot be reinstated by the Originator without getting your express permission to that effect. So if you cancel your Direct Debit, the originator cannot use the contract to reinstate it - they have to get your permission again, or obtain a new instruction.

 

For Paperless Direct Debits, if you dispute having given your authority for the instruction, the originator has no case for a counter claim as they do not have your signature to back up their case.

 

Remember that the Direct Debit Scheme is a vehicle for collecting payments, not for enforcing a contract. If you dispute a Direct Debit for one of the reasons above your bank should refund you straight away, it is up to them to recover the money from the other party. However, if you have received goods or a service, you could still be liable for the payment for it - the originator is within its rights to pursue the funds through the legal system - so don't think you can use the system to get stuff for free

[f7200]

Just a quick add on.......!General DD info.

 

The system that banks use is called AUDDIS (automated Direct debit instruction system) Its a bit like old fashioned Telex cross with email. most large companies and business' are members of AUDDIS, which allows a DD to be set up without a seperate signed mandate. Its usually used when you set up a DD paymnet over the phone or internet eg car insurance. All that happens is you acct number and sort code and account name plus recipient companies bank details get sent to you r bank who then process on to your acct. This is then avaiable to view on your acct if you use inernet banking. The information about frequency, acct numbers etc is given the first time they come and debit you. A new DD cannot be claimed on for 14 days once it has been registered and active. As this allows you to return or cancell what ever it was you brought etc..,

 

The DD is an agreement between you and the compnay not the bank. Therfore the bank litteraly becomes a processing facility it will not have been given T&C or your agreement with the company, your bank do not recieve any more information than that. As it is your responsiblilty to monitor your acct.

 

If you cancell a DD but are still owing or using what ever it was that required the DD in the first place the compnay will probably set it up again unless they have received either a verbal or written request to stop debiting and stopped supplying you with what ever it was.

 

If funds are debited after this then you can claim them back under an indemnity claim through your bank and they will give you a conditional refund on the basis that your bank are able to claim the funds back from the company. This is part of the DD garuntee.

 

Use a standing order its alot easier for you to monitor and cancell!

 

Hope this is of use:)