Non collection of direct debit.

[auditt]

I have heard thro' the grapevine, that if a company does not collect a direct debit for a year due to a administration error on that companie's part, and a year later to the day, it is discovered by that company. That company can only claim back 6 month's worth of the uncollected direct debit and they have to 'wipe clear' the remainder of the debt.
Is this true????

Thanx inadvance...........AudiTT.

[bednobs]

not sure but that definately isnt the case with, for example council tax

[kempie]

The Direct Debit Guarantee ensures that if payment is taken earlier than the specified date or if the amount taken is greater than that specified then a full and immediate refund of the error will be made to your account.

However if the payee takes too little (or not at all) then it is up to you to inform them of the error and if any unsecured debt is incurred by you due to this type of error then the situation described by IAP is accurate i.e. in England, Wales and NI action to recover the debt through the Courts must commence within 6 years, or 5 years for Scotland.

[Zax47]

I'm pretty certain that the year-and-a-day thing is either a myth or American. Either way it's not true/applicable here. It's 6 years for debts England and Wales, 5 years in Scotland.

Sorry, but you have to pay up!!

[foodluva]

Sorry AudiTT but this is untrue. Any monies owed are valid for 6 years so they could technically reclaim missed payments even if they extended back 6 years. They do however, need to give you advance notice that they intend to collect the arrears or you would be within your rights to return the direct debit unpaid from your account. However, you would need to pay the arrears as soon as they sent you their intent to claim in writing. However, any decent company will acknowledge their error and negotiate payment in instalments rather than a lump sum. Hope this helps.