Direct Debits?

[observer]

Why do the Utilities etc seem to have an obsession with getting folk onto direct debit? 

[asperity]

Less paperwork and more chance of them getting their money every month. I, for one, prefer it.

[Davy51]

And they can increase your payments whenever they want & you don't notice till you check your bank statement.

[Cleopatra]

When I was in the uk, a lecky rep called. Asked would I prefer to pay by direct debit. Told him I would be interested so he worked out how much per month/quarter they would take from my bank account. Forget the actual amount but as soon as he told me the amount I told him to stick his direct debit. Somewhat surprised he asked me why so I told him that would work out at almost double the amount for my yearly bills. "Oh...," he said, "well that's the least amount we would consider taking so it really wouldn't be suitable for you." He excused himself and left.

[Eagle]

 Direct Debit is the most efficient method for both supplier and customer. I submit my meter readings on the 8th/9th of every month, they send me my bill on the 15th and take the money on the 30th. I only pay for my usage, however most customers use it to equalise high and low usages but these payments always seem to put customers in credit to the suppliers advantage.

[observer]

Agree with Davy, not prone to giving them the key to my bank account.

[asperity]

I'm not in any position to pay by any other method for most regular bills, however I've had no reason for complaint.

[Lt Kije]

I also agree with Davy

[Bill]

I bill all my customers by direct debit because it makes absolute sense for everyone concerned. It helps keep my admin costs down which in turn allows me to keep my prices lower. In my experience, comments like Observers about giving someone the keys to their account is a point of view shared only by an extremely small minority these days. In fact I’d go so far as to turn that one round and say that anyone who thinks that way and offers only to pay in cash then quite honestly I wouldn’t do business with them. If someone doesn’t trust me then why should I trust them because I know there’s a lot of dirty money out there that cant be shown in a bank account.

 

Bill

[Peter T]

All my utilties are on DD plus rates. Saves a lot of mither.

[asperity]

So for all you worry worts (the usual suspects I notice):

 

The Direct Debit Guarantee Scheme

"The direct debit guarantee applies to all banks and building societies taking part in the direct debit scheme. It says that:

• if there is a change in the amount to be paid or the payment date, the person receiving the payment (the originator) must notify the customer in advance. Advance notice can be given in written, electronic form or orally.
• if the originator or the bank/building society makes an error, the customer is guaranteed a full and immediate refund of the amount paid.
• customers can cancel a direct debit at any time by writing to their bank or building society."

Reference: The Financial Ombudsman - Issue 27 - Banking - direct debit guarantee

 

So, no, it doesn't constitute giving anybody free rein with your bank account.

 

[observer]

It does, until and unless you spot it in your statements.

[asperity]

Yes Okay Obs, just don't bother reading the Direct Debit Guarantee and carry on living in your world of ignorance.

[observer]

I had 5 identical letters, in rapid succession from a major service provider, pleading with me to transfer to DD; and folk are argueing about it saving money?  Sorry, but if someone's firing that much mail at me, I start to dig in deeper. So, I won't be leaving my e-wallet with anyone - thankyou.

[asperity]

So what did your excavation uncover Obs? As a user of Direct Debits I always know in advance how much is going to be taken from my account. If you haven't used DDs how do you get the notion that companies can take whatever they like from your account? Hearsay evidence?

[Davy51]

I use DD all the time but utilities especially have no conscience when it comes to increasing payments without asking the customer first. That is why these companies don't like standing orders because they are controlled by  the bank account holder !

[observer]

Which is how I prefer it Davy!

[Bill]

Observer is correct in that a direct debit company like mine can take payments directly from a customers account without notification.

If I wanted to, I could  simply up everyone's monthly bills by £100 and that would go out of their accounts on the due date. Of course I'd never do anything like that and my customers all know that, so it does come down to basic trust. If I were to do this though, under the guarantee scheme the customers would get the money back and we would get a right rollicking and possibly have the facility withdrawn. Any company that had gone through all the hoops to get DD facilities set up really wouldn't want to do anything like that.

 

I've just sent out payment schedules for the coming year to all my customers and I've had zero complaints. I have one customer that refuses to be on Direct Debit because hes a smart cookie and knows exactly what companies like mine are up too. I have to write to him to ask that he writes to his bank to cancel his previous standing order and set a new on for the new amount. He'll forget of course (he always does) the I'll have to invoice or credit him for the difference. It's all a huge waste of time for a small company like mine and I've half a mind to tell him to look else where.

 

You need to be very certain who the bad guys are in all this and trust me it's not the companies offering this method of payment. All of the hassle and grief comes from the customers who's direct debit bounces on us and then who then send us a cheques that we have to drive into town to bank, only to find that that bounces and it costs us every time this happens. Mistakes can happen but the customer is protected unlike us. We made a mistake recently and had £1700 paid into one of our customers accounts instead of our own and we can't now get it back. 

 

Bill

[Davy51]

Bill ,in  your case as an approachable company there is nothing wrong , but with regards to contacting utilities about a similar situation , most people would give up at the first hurdle because you finish up going round in circles which ensures that utilities can go on taking advantage of their customers & accruing a surplus of cash for their businesses.

[Eagle]

 utilities can go on taking advantage of their customers & accruing a surplus of cash for their businesses.

 

Only if you are daft enough not to cancel the DD.

[asperity]

I have had one company write to me apologising for taking a DD on the wrong date and offering to pay any bank charges that I had incurred due to their error.

[observer]

One plus in ringing these large companies over "a mistake", is that you can listen to a classical record for half an hour, while waiting to get through!

[Bill]

Its not the direct debit that's at fault, it's more the fact that some companies get their billing wrong in which case find a better company.

 

 

 

Bill