A direct debit is an instruction from a customer to their bank or building society that allows another organisation to collect varying amounts of money from their account.
Direct debits are used for paying everything from household bills to charitable donations to credit card accounts.
Run by BACS Payment Schemes Limited (www.bacs.org.uk), a 'not for profit' industry body, every direct debit is protected by three principal safeguards: an immediate money back guarantee from the bank or building society if an error is made, advance notice from the organisation if the date or the amount of the direct debit changes and ultimately, the right to cancel.
Paying bills by direct debit can also work out cheaper, with some companies reducing the amount customers have to pay because they do not have to chase money with this scheme in place.
Customers can be charged a transaction fee when payments are missed; fees are also levied if the supplier requests a missed payment. Banks can refuse a direct debit on some accounts.