Direct debit is an UK automated bill payment service, covered by guarantee. Payments are collected automatically from most UK bank accounts, and debited on a regular basis. You agree the amount and date of debit with the billing company, who can only change this after written notification.
You can set up a direct debit by either filling in a form or, with some organisations, by telephone or internet application. Once the organisation has received your instruction they forward to your bank/building society for processing.
In order to set up a direct debit you have to provide
If your payment date falls on a weekend or bank holiday the company must take the money from your account after the due date, unless they notify you.
To cancel a direct debit simply inform your bank or building society, giving the name of the company being paid, your customer reference number, and the information you gave when you set up the direct debit.
The direct debit guarantee, which all companies must abide to is as follows
- All Banks and Building Societies that take part in the Direct Debit Scheme offer the Guarantee. The efficiency and security of the Scheme is monitored and protected by your own Bank or Building Society.
- If the amounts to be paid or the payment dates change, the company will notify you normally 14 days in advance of your account being debited or as otherwise agreed.
- If an error is made by the company or your Bank or Building Society, you are guaranteed a full and immediate refund from your branch of the amount paid.
- You can cancel a Direct Debit at any time by writing to your Bank or Building Society. Please also send a copy of your letter to the company.
Almost 32 million people in the UK now use Direct Debit, paying an average of 6 bills using this method. In 1999, nearly 1.9 billion direct debits were processed by the high street Banks and major Building Societies. In 1998 70% of cable and satellite bills, 75% of mortgages, 46% council tax, 42% of water rates, 36% of TV licences, 45% of gas and 42% of electricity bills were paid by Direct Debit.
Sumarised from http://www.directdebit.co.uk