What Is A Direct Debit? | Set Up Direct Debit – HSBC UK (2024)

FAQs

What Is A Direct Debit? | Set Up Direct Debit – HSBC UK? ›

A Direct Debit agreement between you and your bank allows businesses to collect money from your current accounts on certain dates, excluding weekends and bank holidays. You can set up a Direct Debit to a make one-off payment, but they're commonly used to manage regular or ongoing payments, such as: household bills.

Even if there is insufficient funds in your account, your bill payment will be automatically deducted from your Overdraft Account, if you have.

The Direct Debit Guarantee protects you if there's an error with a Direct Debit payment. These include: payments taken after the Direct Debit is cancelled. payments taken on the wrong date.

A Direct Debit is an instruction from a customer to their payment service provider authorising an organisation to collect varying amounts from their account, as long as the customer has been given advance notice of the collection amounts and dates.

If you don't have enough money in your account

Most banks will contact you if a payment has failed, giving you a deadline to put enough money in – often by 2pm that same day. If they still can't make the payment, you might have to pay an unpaid transaction fee or overdraft interest if they make it anyway.

Your bank will typically try to process the payment again. If it fails again, they may charge you a fee. You should also contact the company you owe money to explain the situation and make alternative payment arrangements.

The Direct Debit Guarantee applies to all Direct Debit payments. It protects you in the rare event there's an error in the set up or collection of your Direct Debit, for instance, if a payment is taken on the incorrect date, or it's for the wrong amount. The Guarantee only protects your Direct Debit payments.

To cancel a Direct Debit, return to the Direct Debits section, select 'Show Details', 'Cancel Direct Debit' and then again to confirm. So It's as simple as that!

HSBC and Santander have agreed, following CMA action, to refund customers after they both broke a legal order. HSBC was found to have twice broken Part 6 of the Competition and Market Authority's (CMA) Retail Banking Market Investigation Order and is refunding £8m to 115,000 customers.

How do I set up auto debit with HSBC? ›

A Direct Debit is an instruction from you to your bank that authorises a company to take an agreed amount of money from your account. You won't be able to create a new Direct Debit yourself. You'll need to contact the company you want to pay and they'll arrange for you to complete a Direct Debit instruction.

Please fill in the whole form using a ball point pen and send to: HSBC Customer Service Centre, BX8 2HB.

While overall, this payment method is safe, secure, and convenient, there are potential disadvantages of Direct Debit to be aware of. You can be charged overdraft or late fees: If there are insufficient funds in the buyer's account, the Direct Debit might still go through with overdraft protection.

People use Direct Debits to pay monthly bills and make one-off payments. They're a simple way to manage regular payments, such as: Utility bills. Gym memberships.

Can Direct Debits be paid from accounts outside the UK? No, Direct Debits can only be set up from a UK bank account.

However, your bank may refuse your purchase if it will overdraw your account. If you do opt-in for overdraft protection or coverage, then your bank may pay a debit card purchase or ATM transaction, even if the transaction overdraws your account. You will be charged any overdraft fees that are incurred as a result.

Most of our accounts (except our Basic Bank Account) come with an interest-free buffer. If you borrow more than this, you'll need to pay interest on the amount you've borrowed. You can pay your overdraft back by transferring money into your current account.

If you don't have enough money in your account to pay a standing order, it may be refused by your bank. When this happens, your standing order stops until the next scheduled payment. Some banks will have a 'retry process', where they will attempt to send your standing order again.

What happens when you don't have sufficient funds? Not being able to pay your debit order because of low funds will result in a penalty fee, as well as a late-payment fee and added interest to your account. Bounced debit orders can reflect negatively on your credit profile, and affect your credit history in future.