5 May 2022

Help Yourself

by J.R. Thomas

At long last, a single trumpet has sounded.  A still small voice has cried out.  A flag of defiance, modest yet proud, has been raised.  Don’t get too excited, the battle is just beginning, but that a government minister, and a rising star at that, should take up the cause gives a little hope. A little hope that the day of the Direct Debit is not ending, but perhaps that the dawning of the ending is beginning.

“The Direct Debit”, you guffaw, throwing your screened instrument down on the buttered toast, “What nonsense is this?”  No nonsense, my friends, as a well-known Tory is wont to say.  Kwasi Kwarteng, the Business Secretary, has ordered Ofgem, the energy regulator, to enquire urgently into the way in which the UK energy retailers are using their ability to help themselves to consumer’s hard earned money to shore up their cash flows.  The energy company’s cash flows, that is, not those of their harassed customers.   

We all use DD’s. Fill them out online and your invisible commercial friend will do the rest.  Name and address here, name of bank and sort code there, account name and number along the bottom.  No need ever to worry about missing a bill again: “We, your retail partner, do the rest, emailing your bill and ensuring payment from your account on the due date.  Or perhaps before the due date, and maybe a little extra, because what with our costs going up and this beastly inflation, you don’t want any nasty surprises next month, do you?”

“And if we make a mistake, heaven forfend, but you never know, all you have to do is get onto your bank and they will instantly, more or less instantly, give you your money back and sort it out with us.  What could be easier?”

It’s certainly easy, as would leaving your front door open make it easy for repair men and the chimney sweep to hop in whenever convenient to them, to say nothing of a certain type of redistribution agent (from you to them is the basis of their simple trade).  But do you seriously want to give your bank account details to a multitude of strangers?  Direct debit frauds seem very rare, which is suspiciously surprising, given the number of organisations now permitted by your bank to operate direct debits; not just big businesses but almost any business, local voluntary groups, charities. One day, if it has not happened already, some naughty clerk or account inputter is going to debit every member of the Upper Thames Swan Watcher Club, or whatever, and take £50 from each and move it to their own account and themselves to Rio. 

Your bank will give it back, of course.  We all know, love and trust our high street bank even though they have abandoned the high street, and we all know how quick and competent they always are.  No worries there.

But why put yourself to this risk?  You could send a cheque in a good old-fashioned way, or originate a bank transfer on receipt of an email invoice.  It’s easy, it’s quick, and it puts you back in control.  But it’s much more fun to give a stranger the authority to put their sticky mitts in your bank account. Isn’t it?

Even your electricity company.  They work out what you might spend on power over the next year, add a bit and round it up to cover further possible prices increases, then amend your direct debit and charge you a twelfth of that next month.  It means your nasty surprise comes now, if you bother to read your automated bill or smart meter, and it helps the company cash flow, something we all want to do.

Or it did until Mr Kwarteng got on the case.

Because Direct Debits certainly make life easier, but dealing with money never should be that easy.  In good times and bad we should all keep an eye on who is abstracting money from us. There are lots of ways of checking what your supplier wants and then, if you are happy, sending them the dosh. It does involve a little more work, though really no more than you should be putting in to see what is going on in your spending anyway, and it is much more secure.  So think carefully before leaving your front door open or your bank account at the mercy of strangers.