Direct debit guarantee

7
Found 30th Mar
I just wanna check if what I was told by Barclays is correct.

I had a contract that was cancelled on the 25th. Direct debit paid till the 26th. On the 27th another direct debit was paid when it shouldn't have been paid as everything had been cancelled already.

I contacted Barclays and asked for a refund as I thought I would be entitled to a refund if the payment had been taken in error or fraudulently. In this case in error.
The guy on live chat told me he couldn't stop the direct debit (of course not as it had already been paid) and that I needed to talk to the company for a refund.

I mentioned the direct debit guarantee and he said that for the bank to refund me the direct debit would have had to be cancelled before the payment had been taken. Is this correct?

I sorted out the refund with the company but I have this doubt that what the Barclays CS representative told me is not correct. Would like to know for future reference.
Thanks in advance.
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Yes that is correct. Whoever the contract was with would have contacted your bank a few days before for payment.
Direct debit indemnity scheme is what you are referring to. Bank will refund but in the case where the contract was cancelled 25th and payment taken the next day, that payment will already have been in the system so it would be due out regardless. Could've been recalled that day but once gone, it is gone. In a case like this, it is a lot easier for all concerned to contact the company as chances are they will process a refund within a day or so anyway if the payment wasn't needed. It is however the case that the bank have to indemnity and refund if you ask them to. In my experience (and I have done hundreds of these) in a case like yours, the company refunds automatically and involving the bank leads to duplication and extra work.
Original Poster
psychobitchfromhell21 m ago

Direct debit indemnity scheme is what you are referring to. Bank will …Direct debit indemnity scheme is what you are referring to. Bank will refund but in the case where the contract was cancelled 25th and payment taken the next day, that payment will already have been in the system so it would be due out regardless. Could've been recalled that day but once gone, it is gone. In a case like this, it is a lot easier for all concerned to contact the company as chances are they will process a refund within a day or so anyway if the payment wasn't needed. It is however the case that the bank have to indemnity and refund if you ask them to. In my experience (and I have done hundreds of these) in a case like yours, the company refunds automatically and involving the bank leads to duplication and extra work.


Thanks to you and
@Caroline_1993. I was told the refund will be processed within 14 days by the company. I wanted the money back quicker so that's why I tried to use the direct debit guarantee.
It's a pain to have to wait this long and I hadn't cancelled the direct debit because they say to wait until the final bill is generated.

The direct debit amounted to £28.99 and I am due a refund of £30 something.
hearts221 h, 3 m ago

Thanks to you and @Caroline_1993. I was told the refund will be processed …Thanks to you and @Caroline_1993. I was told the refund will be processed within 14 days by the company. I wanted the money back quicker so that's why I tried to use the direct debit guarantee. It's a pain to have to wait this long and I hadn't cancelled the direct debit because they say to wait until the final bill is generated. The direct debit amounted to £28.99 and I am due a refund of £30 something.


Glad to be of service. Banks are obliged to refund but in a case like yours they would prefer to wait because it is just easier. It really is quite a long winded affair from the bank's point of view. They refund you and then approach the company for the money back. By that time the company have refunded you so refuse to refund the bank. They then have to contact you and say we refunded and so did the company so we need our money back. An awful amount of work
It's called an indemnity claim, if that money left your account when it shouldn't then the bank will refund you instantly under the direct debit guarantee.
Original Poster
psychobitchfromhell11 h, 30 m ago

Glad to be of service. Banks are obliged to refund but in a case like …Glad to be of service. Banks are obliged to refund but in a case like yours they would prefer to wait because it is just easier. It really is quite a long winded affair from the bank's point of view. They refund you and then approach the company for the money back. By that time the company have refunded you so refuse to refund the bank. They then have to contact you and say we refunded and so did the company so we need our money back. An awful amount of work


I get why they would wait. The guy from Barclays told me they wouldn't refund because, according to him, the direct debit guarantee wasn't even applicable as when the money was taken in error the direct debit hadn't been cancelled already (so it wasn't an error in his opinion ).

If he had said what you explained I would have understood of course. He told me it wasn't up to the bank to refund. End of story.
Caroline_199313 h, 16 m ago

Yes that is correct. Whoever the contract was with would have contacted …Yes that is correct. Whoever the contract was with would have contacted your bank a few days before for payment.



Caroline_199313 h, 16 m ago

Yes that is correct. Whoever the contract was with would have contacted …Yes that is correct. Whoever the contract was with would have contacted your bank a few days before for payment.

Incorrect - The bank is obliged to offer an immediate refund in the event that a Direct Debit has been taken in error or without authority. In the op’s case they were still under contract when the company contacted the bank to take payment hence the validy of the direct debit being taken out.

When direct debit is cancelled need to cancel from both parties not just the bank as the company if owed money can re-instate a direct debit at any time. (Read the banks terms and conditions
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