Direct Debit Guarantee

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Direct Debit Guarantee

Direct debits are now a major part of daily life, with many people using them each month to pay their household bills. The direct debit guarantee is a powerful safeguard for customers. So it’s important that firms make sure their staff understand its provisions.

Unfortunately, many do not. Here are some of the things firms have told customers (incorrectly) when problems have arisen:


‘We don’t operate the direct debit guarantee.’

‘You’ll have to contact the originating company for a refund.’

‘We need a month’s notice to cancel a direct debit.’

‘The guarantee doesn’t apply – because you haven’t suffered a loss.’


If you pay by standing order, it is up to your bank to send the payment. If you pay by direct debit, it is up to the payee’s bank to call for the payment, but you will rightly look to your own bank/building society to ensure the smooth running of any direct debits. Mistakes and errors are covered by the direct debit guarantee.


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.
  • 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.

See here for case studies and decisions by the OFT