More control over Direct Debit

I’m always nervous about using Direct Debit, it just lets a company take whatever they want from your account with no warning or control from me over my spending.

It would be great if Monzo let you have proper control over this like you do with any other payments.

Setup - currently a new direct debit just appears in the list, company X has set it up - why not send me a notification, company X wants to setup a direct debit, for an amount, on a day of the month - “are you sure you want to allow this to happen?”

Payments - each month before the payment is taken, a notification, company X is trying to take £Y from your account, confirm/deny the payment.

I know that supposedly with the ‘direct debit garrentee’ you can get your money back when something is wrong, but its this happens after the fact, and is a going to be a lot of effort, and yea, companys are supposed to inform you of how much they will take and when, but these tend to be paper letters that get lost and you dont remember every month whats happening.

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They won’t put a Yes/No prompt on a direct debit as this could cause you to miss payments, Monzo does notify you in a way as it says X amount is leaving in X days.

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Changing how direct debits work is not within Monzo’s remit.

If you’re that worried about companies increasing what they take, month on month, you’ll have to find an alternative way to pay.

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Hi, :wave:

Monzo does notify you when a direct debit has been set up on the account, and you can cancel them any time within the scheduled payments section of the app.

Within 3-5 days of the debit being due, you’ll see it at the top of your transaction list to let you know so you can either prepare or cancel this.

The onus is really on you and the merchant you made that agreement with, Monzo only handle the request you authorised with that merchant.

So it would be down to the merchant to let you know what amount is due and when, and for you to manage this in terms with your agreement with them.

If you’re not confident in handle your agreements by direct debit it’s probably best you manage them either by standing order, which you set up a payee as you would to pay a friend or family member, and set it to recurring, or just make manual payments either by bank transfer or debit card.

The latter two, would be handled no different to your direct debits, the merchant tells you what is due and when, as per your agreement:

Direct debit - make sure the funds are available to be taken automatically on the agreed date

Standing order/bank transfer/debit card - you’re responsible for remembering to pay them by the date you agreed and with the specified amount

It depends how you work as a person, though some companies, such as Three mobile, offer £5 discount for paying direct debit on their SIM only deals.

Some energy companies also offer discounted rates for paying direct debit.

To add, some companies will text you or email you when your payment is next due just a few days before. I’d speak to those you’re referring to that haven’t done this before, and see if it’s possible for them to do so, or utilise a calendar either in your phone or on your desk as a reminder :relaxed:

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I was of the understanding that once it’s in the feed it’s because the process has started and it’s too late to cancel it?

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I think you can reach out to support to probably sort it at that point?

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You can cancel any time upto the day before it’s due, but it’s worth checking in with both sides for reassurance, most preferable the company you’re ending the direct debit agreement with as there could be charges for non payment.

Monzo don’t charge any fees :partying_face:

Edit: just re read your response again, I’ve never come across an issue personally cancelling the day before, but not tried with monzo just other banks - shouldn’t be handled and different.

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This entire premise is not the case. Companies must warn you at least two weeks in advance if your amount changes. If they take the wrong amount you are guaranteed to have Monzo pay you back immediately. That’s how Direct Debits work for the whole industry, and it works pretty well.

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It does this already (in terms of notifying you) but Monzo have no control on whether you choose to “accept this”

BTW - I noted someone saying you can contact monzo to block/cancel the direct debit/do it yourself. It should be obvious but please, never do that without speaking to the company first, so as to avoid any potential missed payment challenges.

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You’ve technically already “accepted this” by entering into a contract with the company to have a DD. It’s counterintuitive (not to mention potentially putting you in breach of contract) to then have a refusal on the technicalities of the DD being set up.

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I know, and agree

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This is true yes, but there’s a very good example here on this forum of a user being empowered by the data and notifications Monzo provide to fix a problem before thousands of pounds left their account. Most other banks will only tell you after the payment has left.

If this is technically possible, I really hope this doesn’t happen. We already have enough issues with airlines and petrol stations trying to block the use of Monzo, we don’t need more companies blocking the Monzo sort code because some people are declining their direct debits.

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I did direct debit reversal when my supplier went bust and kept charging me. I popped into Santander branch on the day, said it was error and it was instantly reversed and credited to my account.

So yes, direct debit guarantee works and one simply needs to contact your own bank.

And yes you can cancel the inflight direct debit, which will appear as failed on the provider side.

With some companies one can pay otherwise ahead of direct debit submission to make it skip. Some credit cards do it - if you pay the bill off it will not take direct debit out.

You do you, if you don’t want to pay via direct debit, don’t use them. For most of us it is convenient. For example I aligned all my direct debits to come out just after payday, and money comes in, all bills are paid, and I am free to spend whatever.

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To response to most of these comments, which are helpful and interesting - I’ve not been using direct debit for a long time, because I’ve had bad experiences of Student loans company changing the amount, without telling me, and then I spent hours and hours on the phone trying to get the money back.

a few things

xnox:

I did direct debit reversal when my supplier went bust and kept charging me. I popped into Santander branch on the day, said it was error and it was instantly reversed and credited to my account.

That is a lot of effort you went to - I would rather have stopped a payment before it went, I dont want to ever have to talk to customer support.

RichardL

user being empowered by the data and notifications Monzo provide to fix a problem before thousands of pounds left their account. Most other banks will only tell you after the payment has left.

This does sound great - no where in the Monzo app does it explain that this is whats going to happen - without setting up a direct debit I have no idea what controls Monzo will give me

j06:

You’ve technically already “accepted this” by entering into a contract with the company to have a DD.

That maybe true - but this makes a weird relationship with my bank - where some 3rd party is telling my bank this, and they dont even check with me to see if its true - as far as i can tell, anyone with my account number/sort code, could setup a direct debit on my account and it would just be taken for a fact, unless i actively go and block it.

Carlo1460:

Some energy companies also offer discounted rates for paying direct debit.

this is why I’m interested at all in the idea - otherwise I’d just make a payment online - but companies obviously like direct debit as it gives them all the power.

Revels

Changing how direct debits work is not within Monzo’s remit.

Is the whole premise of Monzo that its changing how banking works for the better? Its done that in many ways, with notifcations and visibility into spending that other banks have refused to do, why would they not let me control my money related to direct debit as well

andrew_fishy:

They won’t put a Yes/No prompt on a direct debit as this could cause you to miss payments

Sure a lot of people are fine to pay everything on time all the time, but its not always easy, and sometimes its preferable to miss a payment for one thing over another.

My summary

  • maybe better communication on how direct debit works from Monzo would help
  • I want to control my money, not have others tell my bank for me whats going on

They can improve some things. But direct debits are a standard. Monzo have improved the visibility and notifications around it, but that’s about as far as it can go. It’s like complaining to Volkswagen about speed limits. It’s not within their control.

Preferable yes, advisable no. If Monzo added a “Don’t pay this” button it would cause more problems than it would solve.

Direct debits aren’t the wild wild west, your bad experience has understandably put you off, but millions of people use them for all sorts of things with zero issues.

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This would be where standing orders would come into play as you control those. Direct debits are just an automatic collection of the fund agreement you have with said merchant.

You can add funds to pots to the specific value amounts if you know what’s upcoming.

If you’re concerned about your finances and having troubles keeping up, there are free debt charities out there such as step change or payplan who can offer free advice in managing bills and other debts :pray:

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I cancelled one on Tuesday that was in my feed for Wednesday, it immediately removed it from the feed. Under Direct debit rules I believe you can even cancel on the day it is taken up to a certain time, but as said that may require support to be involved.

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The whole Direct Debit Guarantee is all about your ability to cancel a direct debit at any time and recall the amount taken… I’m guessing you’ve never read the “Direct Debit Guarantee” presented to you every single time you set one up with a company when you agree to pay them by Direct Debit

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You’ve already agreed to company x taking payments by direct debit! I hope Monzo NEVER implement having to confirm each one as this would be worst ball ache ever!

Company X can only set up a direct debit with your consent so WHY would you want yet another conformation prompt in app after you already got a prompt by the company you’re setting up a direct debit with?

These kinds of things would not be features at all IMO as they’d simply make my banking experience far more of a hindrance

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Monzo won’t, because it goes against the DD scheme rules.

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