Can a Direct Debit "Expire"

Yes, direct debits will become dormant if they are not used for a period of 13 months.

See

Yes, the Debiting organisation should be aware they could expire is not used for 1 year + 1 month. A good bank should write to inform you that they are about to expire. They will normally still appear as active but trigger a chain of events if debited and rejected, i.e. the Debitor is alerted and the customer maybe alerted also.

Jerry

Where is this explained to cusomers?

But Cahoot do not write to customers AFAIK.

It seems deliberately misleading for an expired DD authority to be shown as active.. Is there a reason for it?

Removes one of the advantages of Direct Debits - the ability to know that a bill will be paid automatically. Something I find very useful as I travel a lot (currently in Thailand) and can't pay bills when they pop through the door.

However Cahoot neither remove the Direct Debit from the account list nor notify you that they are not paying. And on the other side the collecting organisation was Nationwide, you might expect them to know about the new rules and not try to collect but notify me that a new Direct Debit was due?

For me a mess that has to be sorted out on return to the UK.

Mark BR

I agree. I also live in Asia, and I rely on the direct debit system to keep UK bills paid on time. It might be better if they gave the customer the option of choosing whether or not a direct debit agreement would be allowed to expire at the time it was set up.

Chris

The customer does not set up DDs. DDs are set up by the "originator" (the collecting organisation), having previously obtained the customer's authority. It should be a simple matter for the originator to know whether the last time an existing DD arrangement was used was too long ago, and simply to set it up afresh, perhaps using a slightly different reference number.

If the direct debit had been activated at any time in the 13 month period it would not be cancelled so your argument of paying bills by this system falls down there. How many bills do you have that do not require payment over a 13 month period?

In message , Ronald Raygun writes

That would require a fresh mandate from the debtor.

What would? Using a new reference number? Certainly not. When I ask my bank for a list of active DDs, some (well, OK, one) of the payees comes up as several instances (actually it's the NICO for my Class 2 NI).

Activating a DD doesn't actually require the originator to physically present (and give up) the original mandate document, does it? After all, it is possible to issue mandates over the phone these days, or so I understand, and so there doesn't need to be one.

What argument?

I have credit cards for which DDs are in force to pay themselves from my current account. It could well happen that I use one of the cards rarely enough that I get null bills for 13 months in a row.

It would avoid problems, of course, if the system allowed DD payment requests for £0.00 to go through, the sole purpose of which would be to prevent them going stale.

I was not referring to the bit about new reference numbers but to the bit about setting it up afresh. But now that you refer to new reference numbers I answer that quite simply, the changing of a refno makes no difference to the DD in the circs you describe.

No.

Quite right.

But to reactivate a stale DD mandate then a*new* one has to be established by one of the methods you describe.

I have to admit that I think it is illogical, and I have fallen foul of this myself where a CC card tried to collect the minimum amount and the bank denied it because it was >13months since the last debit. Luckily I had paid the balance less the minimum within the payment period and so I was OK.

On the other hand I hear the argument from the DirectDebitoPhobes who get scared that the AA can still have a Direct Debit Mandate on your account, and reserve the ability to use it, years after you resigned because you had definitely given up the demon drink for ever this time, honest gov.

The banks have had to react to this type of thinking.

I blame Ann Robinson and many of the neurotic anti Direct Debit posters we see in this group

Similar. I have 4 credit cards, only 2 of which are in normal everyday use. The rest are in case the normal cards can't be used, they go faulty, bank refuses authorisation, stolen, lost etc.

As I travel for the majority of the year and UK banks almost always refuse to send replacement cards overseas it has saved me a trip to the UK to collect new cards when my wallet was stolen.

Mark BR

I have several. Its not just regular bills that direct debits are used for, they can be used for things such as transferring money from accounts at one financial organisation to another. ING Direct, for example, use that system.

Also, some credit cards which I seldom use except for things like special offers are affected by this.

Chris

But that would defeat the whole purpose of the dormancy rule, which is to protect customers who had forgotten that a direct debit is still in force from being surprised that money had been debited from their accounts.

Chris

But if they saw debits for £0.00 appearing on their bank statements, this will remind them that there's one in force.

But, given that authority can be given orally, how would an old and a new one be distinguished in practice? Doesn't the originator simply have to assert that "authority has been given", and all will be well unless and until a dispute arises, such as the customer trying to deny having given or renewed it.

I think you may be confusing continuous debit authorities with direct debits.

No, I don't think so. Did not you yourself agree that DD authority can be given over the phone?

Ahh yes! thats one all then (i.e. the ASU)