Direct Debit Guarantee | Consumer Claims Handbook

#At a Glance


Difficulty	⭐ Easy
Time to DIY	10 minutes
Payout	Full amount taken
Time Limit	No limit (but act quickly)
Escalation	Financial Ombudsman Service

#What Is It?

The Direct Debit Guarantee protects you when:

A payment is taken without your permission
A payment is taken on the wrong date
A payment is for the wrong amount
You didn't receive notice of a change to the payment

Your bank must refund you immediately – no investigation needed first.

#Am I Eligible?

#✅ You're covered if:

A company took money without your authorisation
They took the wrong amount
They took it on the wrong date
They didn't give advance notice of amount/date changes
You cancelled the direct debit but they took payment anyway

#❌ The guarantee doesn't apply if:

The payment was correct but you dispute the underlying bill (contact the company first)
It was a standing order (different rules apply)
It was a card payment (use chargeback instead)

#How It Works

The Direct Debit Guarantee states:

The amounts and dates of collection will be notified to you in advance
If an error is made, you're entitled to a full and immediate refund
You can cancel at any time

This is an industry-wide guarantee – all banks and building societies in the UK must honour it.

#Step-by-Step Process

#Step 1: Contact Your Bank

Call, visit a branch, or use online banking
Say: "I need a refund under the Direct Debit Guarantee"
Explain what happened

#Step 2: Get Immediate Refund

Bank must refund you immediately
No investigation or waiting period required
The bank will then recover the money from the company

#Step 3: Cancel the Direct Debit (If Needed)

If you don't want future payments, cancel the direct debit
Do this through your bank, not just with the company

#What to Say to Your Bank

"I'd like to claim under the Direct Debit Guarantee.

On [date], [company name] took £[amount] from my account. This payment was [choose one]:

Not authorised by me

For the wrong amount (should have been £X)

Taken on the wrong date

Taken after I cancelled the direct debit

Under the Direct Debit Guarantee, I'm entitled to an immediate refund."

#If the Bank Refuses

Banks sometimes try to avoid immediate refunds. If they refuse:

Quote the guarantee: "The Direct Debit Guarantee entitles me to a full and immediate refund"
Ask to speak to a manager
Make a formal complaint – reference the Direct Debit Guarantee
Escalate to the Financial Ombudsman if still refused

#Direct Debit vs Standing Order

	Direct Debit	Standing Order
Who controls it	The company	You
Amount can vary	Yes	No (fixed)
Guarantee	Yes – full protection	Limited
Refund if error	Immediate, no questions	Depends on circumstances

#Cancelling a Direct Debit

To stop future payments:

Tell your bank – they must cancel immediately
Tell the company too – to avoid confusion and debt collection
Check your contract – make sure you're allowed to cancel the underlying service

Note: Cancelling the direct debit doesn't cancel the contract. If you owe money, the company can still pursue you.

#Common Questions

Q: What if I still owe the company money?

The guarantee still applies – get your refund first. Then resolve any genuine dispute with the company separately.

Q: The bank says they need to investigate first – is that right?

No. The Direct Debit Guarantee requires an immediate refund. The bank investigates afterwards.

Q: Can the company take the money back after my refund?

Only by setting up a new direct debit (which you'd need to authorise) or by other collection methods if you genuinely owe them money.

Q: What if the company disputes my claim?

That's between the company and your bank. You get your refund regardless.