17 Jun 2022

How does direct debit authorisation work?

Direct Debit Authorisation

Direct debit authorisation works when a user gives a company permission to take money out of their bank accounts or credit cards. Typically, when signing up for a service online, there is a notice and the terms and services. Within these terms and services is a contract that states the terms of the agreement. Once the payment is authorised, the company can continue taking money after providing the product or service.

When using a direct debit service, it is important to keep all documents, including the terms and agreements. Within these terms are specific rules and guidelines that both the user and the company need to follow. Information like the exact date of authorisation as well as bank details is listed in these documents. Without your authorisation, a company cannot charge your card or your bank for the product/service. 

There are also ways to cancel a direct debit authorisation. It is easier to call the company directly and cancel the agreement. If you do this, always get confirmation and evidence that the company can no longer charge your account based on the terms set.

Direct Debit Authorisation Conclusion

All companies and services require authorisation and permission to utilise direct debit. When a person signs up for a direct debit payment system, they are giving permission to the company to charge their account. All in all, this is a great service that makes paying monthly and fortnightly bills free, easy, and convenient. No longer do you have to call and wait for hours to pay a bill!

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