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I have seen a few posts recently referring to direct debits and feel this may help some guys with the complexities and responsibilities of making regular monthly payments. It worries me when I see advice to cancel direct debits without being aware of the possible consequences.
There are 3 different ways of setting up regular payments :
Standing Order
This is set up by you with your bank to make a fixed payment at agreed intervals and can be cancelled at any time by you. Some financial institutions may require this in writing but can also be done by phone or by on line banking.
Direct Debit
Most companies (Originators) require this method of payment where the monthly charge is variable and the Originator is authorised by you to take that amount at an agreed date each month. Authorisation is made by mandate which either you or the Originator send to your bank. The direct debit is covered by a guarantee which all originators are legally bound by. Some of the main points are :
The Originator must advise you in advance of any change in the terms or date of your payment
If your bank or the Originator make a mistake with reference to your payment, you are guaranteed a full and immediate repayment of the amount paid back into your bank/building society account. Do not accept being told that the repayment will take 10 to 14 days. In terms of a direct debit the key words are immediate and full repayment.
You can cancel a direct debit at any time either in writing to your bank or building society or again by on line banking. You cannot do this by telephone.
Be aware however, if you cancel the direct debit when outstanding monies are owing, this may affect your credit rating as the Originator is bound to update your credit file and this may well have a major bearing on future loans/mortgages or contracts.
Recurring Payments
These are set up by giving the Originator your Debit or Credit Card Number instead of your Sort Code and Account Number and authorise the Originator to take payment each month.
Please be aware - never, ever set up a payment using this method - you cannot cancel these payments. This can only be done by the Originator and can involve lengthy and time consuming problems getting them to cancel your payments and to refund any agreed over-payments/fees.
I hope this may be of some benefit to any of our forum members.
There are 3 different ways of setting up regular payments :
Standing Order
This is set up by you with your bank to make a fixed payment at agreed intervals and can be cancelled at any time by you. Some financial institutions may require this in writing but can also be done by phone or by on line banking.
Direct Debit
Most companies (Originators) require this method of payment where the monthly charge is variable and the Originator is authorised by you to take that amount at an agreed date each month. Authorisation is made by mandate which either you or the Originator send to your bank. The direct debit is covered by a guarantee which all originators are legally bound by. Some of the main points are :
The Originator must advise you in advance of any change in the terms or date of your payment
If your bank or the Originator make a mistake with reference to your payment, you are guaranteed a full and immediate repayment of the amount paid back into your bank/building society account. Do not accept being told that the repayment will take 10 to 14 days. In terms of a direct debit the key words are immediate and full repayment.
You can cancel a direct debit at any time either in writing to your bank or building society or again by on line banking. You cannot do this by telephone.
Be aware however, if you cancel the direct debit when outstanding monies are owing, this may affect your credit rating as the Originator is bound to update your credit file and this may well have a major bearing on future loans/mortgages or contracts.
Recurring Payments
These are set up by giving the Originator your Debit or Credit Card Number instead of your Sort Code and Account Number and authorise the Originator to take payment each month.
Please be aware - never, ever set up a payment using this method - you cannot cancel these payments. This can only be done by the Originator and can involve lengthy and time consuming problems getting them to cancel your payments and to refund any agreed over-payments/fees.
I hope this may be of some benefit to any of our forum members.
Oh well, will swap network when that happens then.
Obviously if your outwith your contract then you are free to do so.
A benefit of buying sim-free phones and using simplicity contracts
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With a big company such as O2 you will have no problems paying by credit card. It would not be my preference paying a monthly account this way, but it is obviously more convenient to yourself, however, problems arise when trying to cancel monthly payments to some small retailers, especially based overseas, where you pay a monthly figure which may/may not vary.
This would also include regular payments or payments classed as subscription**, where payments are made on a weekly, monthly or quarterly basis. Chasing up to cancel these payments can be fraught, time consuming and very stressful. Cancelling the credit card from which the payments are taken does not always stop these payments if you have get a replacement card as the payments can roll over to the new card.
The reason behind this thread is just to make people aware of possible consequences when making monthly payments this way and not to infer that you will always have a problem using this method of payment. But, I would recommend people steer clear of recurring payments if there are alternatives.
With a direct debit or standing order you are in control of your payments. With recurring payments you rely on reputation and integrity of the retailer.
** example, on line payments to overseas based adult websites, gambling sites, magazine or video clubs etc. are fraught with danger and I would avoid them like the plague.
This would also include regular payments or payments classed as subscription**, where payments are made on a weekly, monthly or quarterly basis. Chasing up to cancel these payments can be fraught, time consuming and very stressful. Cancelling the credit card from which the payments are taken does not always stop these payments if you have get a replacement card as the payments can roll over to the new card.
The reason behind this thread is just to make people aware of possible consequences when making monthly payments this way and not to infer that you will always have a problem using this method of payment. But, I would recommend people steer clear of recurring payments if there are alternatives.
With a direct debit or standing order you are in control of your payments. With recurring payments you rely on reputation and integrity of the retailer.
** example, on line payments to overseas based adult websites, gambling sites, magazine or video clubs etc. are fraught with danger and I would avoid them like the plague.
I pay mine via the online payment option, instead of direct debit. that way i know the accounts been paid just after i get paid 
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As long as this way is convenient for you, then no problem. But make sure you don't forget a payment or make a late payment. The big advantage of a DD is that you don't forget.
lol i know i won't forget...if I do i just ring retail helpdesk as I actually work for o2 and my bill comes out the day after i get paid
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