What’s the difference between a Direct Debit and a standing order?

When you set up a Direct Debit you are essentially instructing your bank or building society to allow a company you need to pay regularly to collect the money you owe them from your account. The company must have provided you with advance notice of how much they will be taking and when.

Once the Direct Debit is arranged, the money will be deducted automatically on the agreed date. If the company you’re paying needs to amend the date or amount, they must notify you first.

You can usually see all the Direct Debit payments you’ve set up on your account, as these payments have a DD next to them. You can cancel a Direct Debit whenever you want by contacting your bank or building society either by phone or online. Once you’ve cancelled a Direct Debit it’s worth checking your next few bank statements just to make sure the payment isn’t still coming out of your account.

If you set up a direct debit, you’re automatically protected by a ‘direct debit guarantee’ that says you’ll get your money back if a direct debit has been set up in error or the wrong amount has been taken. If this happens, you should be able to get a refund straight away from your bank or building society. Find out more about the Direct Debit guarantee here.

It doesn’t matter whether it’s a mistake by your bank or the organisation you’re paying, it’s still the bank that must refund your money.

Author: wpadmin

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