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Direct debits are well in credit

Independent, The (London), Jan 14, 2001 by CLARE FRANCIS

Direct debits are an increasingly popular way of paying the monthly bills. Three billion were processed last year, compared to 1.9 billion in 1999. The substantial rise is not surprising; direct debit ensures your bills are paid on time without you having to worry about making it to the bank.

According to the Bank Automated Clearing System (BACS), on average we each have six direct debits set up. The Royal Bank of Scotland Group (RBS) reports that the number of people using the system is increasing by 8 per cent a year.

So we clearly welcome the ease and convenience that direct debit offers. But it is not foolproof. BACS says that mistakes are rare, but with so many transactions, they do occasionally happen.

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Common mistakes include payments not being made, too much money being debited, cash taken out twice or payments made before the correct date. One Independent on Sunday reader who switched her electricity provider discovered that the monthly direct debit payments had started early - before she had even switched to her new provider. Such incidents highlight the importance of checking your bank statements carefully. "There are safeguards to protect the consumer, but direct debit does rely on bill payers taking some individual responsibility," says Marie Kesselman, communications manager at BACS.

If money is incorrectly deducted from your account, you are entitled to a refund under an agreement which all banks are signed up to. The company taking the direct debit is also obliged to inform you of the amount that will be deducted each month and the date on which it will be taken.

If you find a mistake has occurred, Ms Kesselman says the first point of contact should be the company that has taken the money. If they don't refund you, contact your bank.

Unlike standing orders, where customers instruct their bank to make a payment, direct debits are arranged by the beneficiary company and authorised by the customer. So to cancel a direct debit, you should contact the company rather than the bank.

While many people regard direct debits as a convenient method of payment, there are some who still prefer to write a cheque when bills come in, finding this an easier way to keep track of their finances. A direct debit is not mandatory so you don't have to use it unless you want to. Although it is efficient, it can be restricting: you may not have a choice as to when the money is debited, which can be inconvenient depending on when your salary is paid into your account.

Direct debits are well in credit

Independent, The (London), Jan 14, 2001 by CLARE FRANCIS

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