Direct debit can be a really good way of paying for services and goods that you want to buy.  When the direct debit system was being introduced to the British public in the late 1960s the system’s unique selling point was often the idea that to pay by direct debit gives the purchaser the freedom to spend more time on what they want to do because once it is set up their worries are over.

Even today, companies offer financial incentives to tempt consumers in and there are many companies that only accept payment by direct debit.

But don’t be fooled into thinking that you can give the company you are paying permission to take money out of your account without taking the time to check what they are up to.

LPG contacted the Financial Ombudsman — tel: 0800 023 4567. The FCA can help to sort out any problems that cannot be resolved with your bank, or a company that has collected too much money from your account if they are not acknowledging the issue.  This is all set out in their Direct Debit Guarantee.  We asked a few questions about direct debits in the light of letters that we have received on the subject, but they referred us to the BACS Service desk.

This is the agency that educates and makes sure that the system works. They told us that if the company that are being paid changes the amount or the frequency of payments, they have to inform the client in advance but they also told us that ending the agreement is the responsibility of the client. 

It is good to know that you can instruct your bank to end any direct debit agreement at any time (provided there is no small print dictating the length of the agreement) but it appears that setting up a direct debit and then forgetting it is not a good idea after all.

If you notice a mistake and contact the company most of them will reimburse you, but if you don’t realise what is going on, it appears that a surprising amount of companies are unlikely to notice for you.

Maureen B