Key Post Banks must now refund unauthorised direct debits

It removes many of the risks associated with paying by direct debit. People were wary of giving the ESB, Bord Gais and other service providers open access to their bank accounts, because it can be impossible to get the money back if a bill is disputed. The directive, however, requires banks to refund direct debits on request within eight weeks of payment (of the direct debit).

Tom Conlon, of Bankhawk Banking Advisors, said: “If you have a dispute with your gym, for example, you can ask your bank to refund all direct debit payments made in the past eight weeks. You don’t have to give a reason and the money should be back in your account before you even approach the gym to argue your case

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Brussels said:

The right to a refund is now enshrined in legislation. If a direct debit is posted to your account and it is not in line with previous spending patterns you bank is obliged to refund. The timeline for requesting this refund is 8 weeks after the debit date.

In the same way you are entitled to an immediate refund of an unauthorsed direct debit once it has been established that the direct debit was unauthorised. The timeline for a refund for an unauthorised direct debit is 13 months.

With regard to cancelling a direct debit the rules are quiet clear that you should contact your Bank who must accept the cancellation. It is also recommended that you inform the originator though you are not obliged to do so.

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More info about SEPA Direct Debits
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SEPA Direct Debit provides a convenient and secure means of paying bills across Europe. Instead of you making payments they will be automatically deducted from your account. Like a domestic Direct Debit you just need to give authority to the receiver of the funds via a mandate - once this is in place the funds can be collected from your account on a regular basis.

Fees and charges for a SEPA DD will be the same as those charged for our current domestic Direct Debits. You can stop a pending/future payment and refunds may be claimed within eight weeks of the Direct Debit date for an authorised transaction (mandate in place) and within thirteen months for unauthorised transactions.

If you want to have very tight control over your accounts you can switch them to "Closed Mandate List" or "Block your Account" from accepting SEPA Direct Debits.

Closed Mandate List
This means that only the following will be paid from your account

• SEPA Direct Debits that have been registered by you in eBanking
• SEPA Direct Debits, that appear on your pending/future transaction list, that you approve prior to the payment date
• Regular collections of a SEPA Direct Debit already approved by you

If the SEPA Direct Debit is not registered or approved by you it will be rejected on the appropriate payment date. To select the 'Closed Mandate List' on the Regular Transfers screen select the "Edit settings for SEPA Direct Debits" button and select the appropriate option.

Block your Account
You can block your account so that it will not allow any SEPA Direct Debits to be collected from it. All SEPA Direct Debits presented on this account will be rejected. To activate this you need to contact your Branch.

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