MyFinances.co.uk
News feeds Free newsletter

All the latest personal finance news - helping you make the most of your money

Bank accounts glossary

Direct Debits

A direct debit is an instruction from a customer to their bank or building society that allows another organisation to collect varying amounts of money from their account.

Direct debits are used for paying everything from household bills to charitable donations to credit card accounts.

Run by BACS Payment Schemes Limited (www.bacs.org.uk), a 'not for profit' industry body, every direct debit is protected by three principal safeguards: an immediate money back guarantee from the bank or building society if an error is made, advance notice from the organisation if the date or the amount of the direct debit changes and ultimately, the right to cancel.

Paying bills by direct debit can also work out cheaper, with some companies reducing the amount customers have to pay because they do not have to chase money with this scheme in place.

Customers can be charged a transaction fee when payments are missed; fees are also levied if the supplier requests a missed payment. Banks can refuse a direct debit on some accounts.


Related articles 


Disclaimer:
myfinances.co.uk is not authorised to give advice under the Financial Services and Markets Act 2000.

Terms:
By using this site, you are deemed to have accepted our terms of use.

myfinances poll 

With the party conference season in full swing, we want to know who do you trust with the economy? Vote now and tell us your views.

Free stuff 

Sign up for our free daily newsletter and other free stuff.