youthmoney

Companies love direct debit.  There’s no argument that it is easy to set up, helps their cash flow, and discourages customers from looking around.

There are certainly advantages for customers, too. But the same characteristics that make it so appealing to the money-takers have—obviously—a downside for those whose money they are taking.

• Ease of set up means an increased likelihood to buy on impulse. Other systems provide more of a breathing space, a chance for second thoughts.
• Helping companies’ cash flow is not good for customers’ budgeting. There’s less chance to juggle bill payments, less flexibility—just an instant and merciless debit.
• The DD inertia means customers are less likely to look around for better deals. Companies don’t need to compete much to keep those who are already hooked.

These are just immediate thoughts after skimming Direct Debit for Dummies, a piece of shameless PR extolling the value of direct debit. It’s intended for use by call centre staff. It has, for instance, advice on how to deal with some victim of the system who rings up saying instead of £40 the company has taken £400. (Tell them to contact their bank and only offer do something yourself if you really have to, is the gist…)

It’s produced by Bacs, the not-for-profit, industry body owned by banks and building societies. Originating companies—those that have passed the financial vetting needed to be accepted in the system—can request up to a hundred free copies. That’s to inform their staff. But nothing wrong with educators trying to use it for young people either. Or just to brief themselves. Try emailing bacsacademy@bacsservices.co.uk with your name, address and asking for copy. Or try the Bacs website.