Direct debits and standing orders

People come to us to complain that: 

• they didn’t authorise a direct debit payment
• there has been an error with the amount, date or frequency of payments
• they cancelled a direct debit instruction but payments continued.

We also occasionally see complaints where a:

• direct debit payment hasn’t been made and a customer has lost out because of it
• customer makes a claim under the Direct Debit Guarantee for payments going back over a long period of time.

When we look at these complaints, we use the regulatory and legal standards that applied at the time of the event the customer is complaining about.

You’ll find rules, guidance and good practice on direct debits and standing orders, in:

• the Payment Services Directive (PSD)
• the Payment Services Regulations 2017 (PSR) for electronic payments – within the UK or to and from the European Economic Area (EEA) – particularly the provisions of Part 6 and Part 7.

If your customer makes a claim under the Direct Debit Guarantee, you have the right to ask your customer for information to support their claim.

You may also find it useful to look at Financial Conduct Authority (FCA) guidance on their approach to payment services and electronic money.

We only look at complaints you've had an opportunity to deal with first. If the consumer is unhappy with your decision, or you don't respond to them within the time limits, they can come to us. 

Each case is different, so what we require will vary. But we’ll look at the facts and evidence from both you and your customer. What we consider will usually include:

• relevant laws, rules and regulations, guidance, standards and codes of practice that were in place when the event happened, including the Consumer Duty
• your electronic records of the: 

• • set-up of the direct debit instruction, including your customer’s authority
  • payment history related to the direct debit.

If the complaint is about the Direct Debit Guarantee, we’ll also take into account:

• the terms of the Direct Debit Guarantee
• any reasons why you think it didn’t apply to this case.

We may ask additional questions, or for specific information.

We follow the FCA’s dispute resolution rules (DISP) and will take into account how you’ve tried to put things right. 

If we uphold a consumer's complaint, we'll tell you what you need to do to sort things out. This may include:

• refunding any charges and interest you applied because of an error with a direct debit payment
• apologising
• compensating the customer for any:
  • direct loss, such as a charge for a late payment
  • consequential loss from missing a payment, for example, the customer couldn’t make an insurance claim because a missed payment meant they hadn’t paid for their insurance cover.

  We may also ask you to compensate them for any distress or inconvenience they’ve experienced as a result of the problem.

  How we handle complaints

Businesses and consumer advisers can contact our Business Support Hub on 020 7964 1400 for information on how we might look at a particular complaint, or for guidance on our rules and how we work.

We also work with businesses and other organisations to help prevent complaints.