Direct Debits are fast becoming the preferred payment of choice here in the UK, but what are they and how exactly do they work?
A Direct Debit is a secure electronic-based arrangement which enables you to make regular payments from your bank account. In its most basic form, a Direct Debit is an instruction from a customer to their bank or building society authorising an organisation to collect varying amounts from their account. Direct Debits are ideal for conveniently managing a household’s subscriptions and bills and can be set up from most bank accounts, building societies and even some savings accounts.
How can I set up a direct debit?
Direct Debits can be set up in writing, over the telephone or via the internet. In most cases, if you have subscribed to a service or utilities provider then you will receive a Direct Debit Instruction to fill in and post back to them. Alternatively you will be guided through the process over the phone when you register with the organisation.
Whenever you set up a Direct Debit payment you will be advised of the amount and the date of collection before the money is withdrawn from your account. Once you have set up a Direct Debit, all you need to do is make sure that there are adequate funds in your account to make the scheduled payments.
You can cancel a Direct Debit any time you choose by contacting your bank or building society- written confirmation may be needed on some occasions. If you have cancelled a Direct Debit and are still receiving goods or services from an organisation, you must then inform them with your new method of payment.
Direct Debit Guarantee
All Direct Debits are protected under the Direct Debit Guarantee. Any bank or building society that accepts Direct Debit Instructions offers the guarantee.
If a mistake is made in the payment of your Direct Debit, by either party, you are entitled to a full and immediate refund of the amount taken from your account.
Benefits of paying by direct debit
There are many advantages of Direct Debits, here are just a few:
– Safe and secure
– Organised and scheduled payments which makes budgeting and keeping track of your finances easier
– A regular payment system can save time in the long run
– Automatic payments mean no late fees or charges
– Protection under the Direct Debit Guarantee
SmartDebit are a leading direct debit bureau who have been offering high quality payment processing services for over a decade.