What is a direct debit?¶

A direct debit is a payment collected from a bank account by an organisation under an existing mandate or authority.

Avoid this assumption: The account holder actively approved each individual collection.

The customer usually authorises the organisation to request payments. The organisation then submits collections according to the agreed arrangement.

The amount may be fixed or variable, depending on the mandate and service.

Relevant records may include the mandate, service-user or originator identifier, reference, collection dates, amounts, notifications, failed collections, cancellations and refunds.

The important evidential event may be creation or use of the mandate rather than the date each payment was collected.

A direct debit can be legitimate, incorrectly set up, fraudulently created or used after a wider account compromise.

The appearance of an organisation’s name on the statement does not necessarily explain the underlying purchase or contract. Merchant descriptors and collecting entities can differ from the brand known to the customer.

Ask the bank what mandate information it holds and ask the collecting organisation for customer, contract, account, order and communication records.

A successful collection does not prove the account holder knowingly agreed to the underlying service. Equally, a denial does not prove the mandate was fraudulent.

Compare the mandate with application records, communications, device evidence and any goods or services supplied.

Distinguish cancellation of the mandate from recovery of earlier payments. Stopping future collections does not automatically reverse previous ones.

If the payment was returned, refunded or disputed, preserve those events separately.

When reporting, state that the organisation collected funds under a recorded mandate unless the evidence establishes more.

Operational takeaway¶

Preserve the mandate and collection history, and investigate who created the authority and what transaction or service it related to.