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Direct debits ‘need safeguards’ to protect customers

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Consumer watchdog Trading Standards has warned that banks must introduce much better safeguards to protect UK current accounts holders who pay their bills by direct debit.

Many businesses take too long to rectify mistakes with their payments and customers are left out of pocket through no fault of their own, it said. If the banks were reluctant to do anything about the problem, then the Government should tackle the problem with legislation to enable customers to seek redress.

Trading Standards added that guarantees that the banks will put cases right where there have been mistakes do not always work.

Tony Northcott of the Trading Standards Institute said that law should be enacted to protect UK current accounts holders when the system goes wrong.

“With more and more companies demanding payments this way, there has to be something put in place to stop people battling these big companies on their own,” he said.

“There’s a need to get their stall in order before demanding payments in this way, as it would appear that the system is not infallible.”

He also said that customers should be reimbursed for any losses arising from mistakes, with the firm responsible for the error paying back any interest made on the payment, in addition to compensation.



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