How does the Direct Debit Guarantee Scheme work?

Money Box

BBC

Business

4.2 • 804 Ratings

🗓️ 1 May 2021

⏱️ 34 minutes

🔗️ Recording | iTunes | RSS

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Summary

9 in 10 of us use direct debits to pay some or all of our regular bills. 4.5 billion payments were processed in the UK in 2019. It’s a simple way to pay - you sign a mandate with a business or organisation and they take agreed amounts on a specified date. They come with a guarantee which protects you if payments are taken mistakenly. Or at least that’s what a Money Box listener thought when a payment for his gym membership went wrong.

Cryptocurrencies like Bitcoin and Ethereum have soared in value beyond any other asset. Ten years ago one Bitcoin was worth one US dollar - today one is worth 53,000 US dollars - nearly £42,000 pounds. One big concern with buying, storing, or selling cryptocurrencies is how secure it is. Paul Lewis talks to an investor who discovered £11,000 had gone missing from his account, as well as cryptocurreny expert Kate Boucherel.

Last week the High Court ruled that high cost lender Provident could move forward with a scheme to pay redress to customers to whom it had mis-sold loans. Provident has said that it can't afford to pay customers with valid claims the full amount of compensation they should receive - despite other parts of its business being very successful. Paul talks to Sara Williams, founder of the debt advisor website Debt Camel.

Presenter: Paul Lewis Researcher: Sowda Ali Reporter: Dan Whitworth Production co-ordinator: Janet Staples Producer: Ben Carter Editor: Alex Lewis

Transcript

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0:00.0	You're about to listen to a BBC podcast, but this is about something else you might enjoy.
0:05.4	My name's Katie Lecky and I'm an assistant commissioner for on demand music on BBC Sounds.
0:10.8	The BBC has an incredible musical heritage and culture and as a music lover, I love being part of that.
0:17.5	With music on sounds, we offer collections and mixes for everything, from workouts to
0:22.4	helping you nod off, boogie in your kitchen, or even just a moment of calm. And they're all put
0:28.3	together by people who know their stuff. So if you want some expertly curated music in your life,
0:35.0	check out BBC Sounds.
0:41.3	BBC Sounds, music, radio podcasts.
0:46.3	Hello, in this Moneybox podcast, how secure our cryptocurrencies?
0:52.5	One listener had more than £11,000 taken from his account in just one minute.
0:57.6	How can you be sure your crypto money is safe? After mis-selling high-cost loans to up to 4.3 million customers, one of the biggest high-cost
1:03.6	lenders goes to court to get permission to pay them a fraction of the compensation they are due.
1:10.3	And last week, the Court of Appeal quashed the convictions of 39 former sub-postmasters
1:15.3	who had been prosecuted for theft, fraud and false accounting.
1:20.2	But if they didn't take it, where is the money?
1:24.3	But first, direct debit is a popular and safe way to pay regular bills.
1:28.3	Nine out of ten of us use it and four and a half billion direct debit payments were made in 2019.
1:34.3	You agree over the phone online or you sign a form and the business or organisation will take your money on a regular date.
1:42.3	Some people find it a bit alarming to give a company permission to take money from their bank account.
1:48.5	So the direct debit scheme comes with a guarantee, which protects you if things go wrong.
1:53.8	Or at least, that's what Moneybox listener Gordon sought when something did go wrong with his payment for Jim membership.
2:01.2	I pay my membership fees for David Lloyd by direct debit on the first of every month.
	...

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