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Direct debit protections asked

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by Elaine Frei
Direct debit protections asked

In the wake of last week’s glitch that saw around 400,000 workers who have their pay deposited directly into their bank accounts receive their pay late, consumer watchdog Trading Standards has asked that protections be put into place for customers who receive their pay that way and who pay their bills by direct debit.

The problem, according to Tony Northcott, of the Trading Standards Institute, is that when mistakes happen in direct debit transactions, the companies involved take far too long to correct the errors, sometimes leaving the customer penalized for late payments or unable to reclaim funds that were paid out of their account in error. The solution? Mr. Northcott recommends that the government should legislate protections if the business community doesn’t take action on the issue. He suggested that besides reimbursement for losses in consequence of mistakes, businesses should pay back any interest involves and compensate the customer for the trouble of setting the error right.

Banks claim that such errors are rare, but with more and more companies demanding payment by direct debit, Trading Standards holds that there should be some sort of protection in place for customers when mistakes are made. Customers, Mr. Northcott says, should not be left on their own to try to obtain satisfaction from those responsible for the mistakes.

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News posted: April 2, 2007

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