Direct Debit Bill Query

ChaosD

Dear Sir/Madam, 

I am paying all of my bills, such as electricity and internet, via direct debit. Would greatly appreciate if you could please advise on the following:

1. Do I have to set up a direct debit myself on 365 online or will the companies do it for me. For example, my electricity bill is paid to Electric Ireland so do I simply wait for them to inform me when to pay them and I do so or do I have to set it up for them on my online account? 

2. For any other bills or utilities paid by direct debit do I have to always set it up to allow them to charge to my account? 

Thanks 

Bank of Ireland: Billy

Hi ChaosD, 

Thanks for your post.

A direct debit is set up by a company. 
The company would ask for your permission to debit your account. This could be in the form of a paper mandate or with your Visa Debit card/Credit Card, over the internet or phone. The company would then send this to permission your branch and you account would be debited.  It is not possible to set up a direct debit on 365 Online. 

I hope this helps. 

Thanks

Billy

ChaosD

Bank of Ireland: Billy wrote: »

Hi ChaosD, 

Thanks for your post.

A direct debit is set up by a company. 
The company would ask for your permission to debit your account. This could be in the form of a paper mandate or with your Visa Debit card/Credit Card, over the internet or phone. The company would then send this to permission your branch and you account would be debited.  It is not possible to set up a direct debit on 365 Online. 

I hope this helps. 

Thanks

Billy

Dear Billy, 

Thanks very much for the reply. 

dub45

Bank of Ireland: Billy wrote: »

Hi ChaosD, 

Thanks for your post.

A direct debit is set up by a company. 
The company would ask for your permission to debit your account. This could be in the form of a paper mandate or with your Visa Debit card/Credit Card, over the internet or phone. The company would then send this to permission your branch and you account would be debited.  It is not possible to set up a direct debit on 365 Online. 

I hope this helps. 

Thanks

Billy

I was very surprised at the contents of this reply particularly as it is being given on a banking forum.

The direct debit scheme has nothing at all to do with payments via debit or credit cards.

Full details of the operations of the DD scheme are here:

http://www.ipso.ie/section/DirectDebitScheme

The most important thing to remember is that the DD scheme covers payments from the bill payers bank account.

What is a direct debit?

"[font=Arial, Verdana, sans-serif]A direct debit is an instruction from a customer to their bank or building society, authorising an organisation (known as an originator) to collect variable or fixed amounts from their account, as long as the customer is given advance notice of the collection amounts and dates.[/font]
[font=Arial, Verdana, sans-serif] [/font]
[font=Arial, Verdana, sans-serif]The payer authorises the originator to collect the payment from the payer’s bank account by completing a Direct Debit Instruction (DDI), by giving the instruction over the phone or on-line. Once the payer has returned the instruction to the originator, the payer need take no further action. If the instruction is given over the phone the originator must confirm the details in writing to the payer".[/font]

While the DD scheme has plenty of faults it does ensure rights for the bill payer and places obligations on the the companies concerned.

Remember that when you sign up for a dd you are not giving over control of your bank account to a company - they have to follow certain rules.


Originators must give advance notice of the date and the amount of each direct debit. The advance notice period is generally fourteen days, or in some cases seven days or less if agreed by all parties, before the direct debit is applied.




[font=Arial, Verdana, sans-serif]Also amounts disputed by the bill payer should not be debited[/font]

You have the following rights under the dd scheme:



[font=Arial, Verdana, sans-serif]The Rights of the Payer[/font]
[font=Arial, Verdana, sans-serif]  [/font]

• If you authorise payment by direct debit, then
  
  • The Originator will notify you in advance of the amounts to be debited to your account
  • Your Bank will accept and pay such debits, provided that your account has sufficient available funds
    
• If it is established that an unauthorised direct debit was charged to your account, you are guaranteed a prompt refund by your Bank of the amount so charged where you notify your Bank without undue delay on becoming aware of the unauthorised direct debit, and in any event no later than 13 months after the date of debiting of such direct debit to your account
  
• You are entitled to request a refund of any variable direct debit which exceeded the amount which you could reasonably have expected, subject to you so requesting your Bank within a period of 8 weeks from the date of debiting such direct debit to your account
  
• You can instruct your bank to refuse a direct debit payment by writing in good time to your Bank
  
• You can cancel the Direct Debit Instruction by writing in good time to your Bank
  

http://www.ipso.ie/section/ConsumerCornerDirectDebits

Bank of Ireland: Billy

Hi dub45,
 
While the details you referenced from the IPSO website in relation to the Direct Debit Scheme are correct, my answers were in direct response to the two questions asked by the OP.
 
Just to reiterate, ChaosD:
 
You can set up a direct debit on your current account or with a Visa Debit/Credit Card. Once you give permission to a company to debit your account, the company will process the instruction. It is not possible to set up a direct debit on 365 Online.
 
Thanks
 

Billy

ChaosD

Dear Billy and dub45, 

Thank you so much for all the information and help. 

Just to clarify, so a direct debit payment simply means that I allow third parties, for example, a phone company to charge to my bank account monthly bills. 

However, before I pay the bill they will have to give me at least 7-14 days notice (either by email or something else) before simply taking it out of my bank account? 

Thanks again

Bank of Ireland: Billy

Hi ChaosD, 

Many thanks for posting.

As you correctly mention, when you set up a direct debit, you are giving a company permission to debit your account.

A company is obliged to give you notice if the direct debit is for a varying amount such as a phone bill that might increase/decrease from bill to bill. For a direct debit where the agreement is for the same amount to be debited for each payment, the company is not obliged to give you notice. 

Please let us know if there is anything else we can help with. 

Thanks

Billy

 

dub45

Bank of Ireland: Billy wrote: »

Hi dub45,
 
While the details you referenced from the IPSO website in relation to the Direct Debit Scheme are correct, my answers were in direct response to the two questions asked by the OP.
 
Just to reiterate, ChaosD:
 
You can set up a direct debit on your current account or with a Visa Debit/Credit Card. Once you give permission to a company to debit your account, the company will process the instruction. It is not possible to set up a direct debit on 365 Online.
 
Thanks
 

Billy

If I was surprised at your first answer then I am even more surprised at this one.  Please check your facts as you are in danger of misleading people who might read this thread. The OP never mentioned credit or debit cards so it was totally unnecessary for you to bring them into your answer.

The direct debit scheme only covers payments made through the direct debit scheme from a bank account.  The direct debit scheme rules or protections do not apply to payments made via a debit card or a credit card.  It is not possible to set up a "direct debit" on a credit or debit card. 

Such payments are often referred to as recurring card transactions.  Also they are not covered by  Regulation 260/2012

In fact here is Bank of Ireland's description of both:

http://boini.bankofireland.com/fs/doc/new-account-pdf/guide-to-personal-banking-may13.pdf

 Page 9:

Direct debits
A direct debit is different to a standing order because you authorise 
someone else (‘the originator’) to take a payment from your account. The 
amount can be different each time if necessary. It is a very convenient 
way to take care of regular payments like phone, gas or electricity bills. If 
the amount of the payment changes, the originator (company taking the 
payment) will tell you this beforehand. You can cancel a direct debit at 
any time up to the date of a payment. If you want to stop a direct debit 
you must write to the originator and to us.


The Direct Debit Guarantee protects you if a direct debit you have not 
authorised is taken from your account. If the originator wrongly takes 
a payment from your account we will refund it as soon as you tell us 
about it.


Recurring or Continuous Payment Authority (CPA) payments


This a regular card payment when you give your credit or debit card 
details to a company and authorise them to take regular payments 
from your account, such as for a gym membership, magazine 
subscription or short term (payday) loan. These payments are often 
confused with direct debits, but do not offer the same guarantee if 
the amount or date of the payment changes




AIB's description:


What is a recurring transaction (or "continuous payment authority")?
A 'recurring transaction' is where you have entered into an agreement with a company or service provider for them to take repeated payments from your Bank Account using your Debit Card.
In order to set up a recurring transaction you must provide the company or service provider with your 16-digit Debit Card number. This payment method differs from a Direct Debit or Standing Order as you set it up directly with the company or service provider, and is not covered by the Direct Debit Guarantee scheme.

These type of payments (continuous payment authorities) have caused lots of problems for people in the UK for example:

http://www.moneysavingexpert.com/banking/recurring-payments

dub45

Bank of Ireland: Billy wrote: »

Hi ChaosD, 

Many thanks for posting.

As you correctly mention, when you set up a direct debit, you are giving a company permission to debit your account.

A company is obliged to give you notice if the direct debit is for a varying amount such as a phone bill that might increase/decrease from bill to bill. For a direct debit where the agreement is for the same amount to be debited for each payment, the company is not obliged to give you notice. 

Please let us know if there is anything else we can help with. 

Thanks

Billy

 

Again this is not correct.  A key element of the dd guarantee is that a company will give the bill payer notice.



If there are to be regular payments of the same amount then this is covered in the dd scheme rules: (Page 18)

"The Originator issues advance notices to Payers.

o The first such advance notice may be included with
or incorporated into the Direct Debit confirmation, or
may be sent at a later date.

o The notice can take the form of an invoice or a
one-off notice detailing a series of payments
over a period of time."

dub45

ChaosD wrote: »

Dear Billy and dub45, 

Thank you so much for all the information and help. 

Just to clarify, so a direct debit payment simply means that I allow third parties, for example, a phone company to charge to my bank account monthly bills. 

However, before I pay the bill they will have to give me at least 7-14 days notice (either by email or something else) before simply taking it out of my bank account? 

Thanks again

Yes that is what the rules say but everyone should remember that the dd scheme is far from perfect - and in particular there is a shocking lack of oversight on originators (i.e the companies who debit accounts).  For example it is impossible to check that companies give the right notice and it is extremely hard to make an effective complaint about companies who do not meet their obligations under the scheme.

Also if your dd happens to bounce it can work out very costly.  Many companies now impose a hefty fee on the bill payer if this happens (without warning the bill payer of the possiblility of this charge when the dd is set up) and also the bank will charge you too. So be warned.

ChaosD

dub45 wrote: »

ChaosD wrote: »

Dear Billy and dub45, 

Thank you so much for all the information and help. 

Just to clarify, so a direct debit payment simply means that I allow third parties, for example, a phone company to charge to my bank account monthly bills. 

However, before I pay the bill they will have to give me at least 7-14 days notice (either by email or something else) before simply taking it out of my bank account? 

Thanks again

Yes that is what the rules say but everyone should remember that the dd scheme is far from perfect - and in particular there is a shocking lack of oversight on originators (i.e the companies who debit accounts).  For example it is impossible to check that companies give the right notice and it is extremely hard to make an effective complaint about companies who do not meet their obligations under the scheme.

Also if your dd happens to bounce it can work out very costly.  Many companies now impose a hefty fee on the bill payer if this happens (without warning the bill payer of the possiblility of this charge when the dd is set up) and also the bank will charge you too. So be warned.

Dear dub45 and Billy,

Wow. Thank you so very much for all that detail and advice. I'll try to make sure that there is enough in my bank for every bill payment I have to make and to keep a rough record of when they should be charging me for any bills. 

Thanks again for all the replies and advice, really appreciating it.