Question to the HM Treasury:

To ask the Chancellor of the Exchequer, pursuant to the Answer of 18 December 2024 to Question 20062 on Bank Services: Direct Debits, what steps her Department is taking to ensure that organisations receiving payments via Direct Debit are held accountable when they do not (a) verify that Direct Debit instructions have been properly authorised by the payment account holder and (b) provide advance notice of the (i) amount and (ii) collection date for each Direct Debit payment, except where an alternative arrangement has been explicitly agreed.

Direct Debits are subject to rules made by Pay.UK, a private sector payment system operator that is regulated by the Bank of England and Payment Systems Regulator.

In order to receive Direct Debit payments, businesses and other organisations must be ‘sponsored’ by a Payment Service Provider (usually their bank or building society). Businesses undergo stringent checks to ensure their identity and that they understand their responsibilities and obligations when using the Direct Debit scheme. If a business does not comply with the rules Pay.UK has a range of sanctions available, including removing the business from the service altogether if necessary.

In the case of any incorrect or fraudulent payments, the account holder is entitled to an immediate refund of any unauthorised amounts collected from their account provider under the Direct Debit Guarantee scheme. Further information about Direct Debits is available at: www.directdebit.co.uk.