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A Direct Debit (DD) is an instruction a business gives to its bank that allows a lender or supplier to collect agreed payments from its account on a schedule. Unlike a one-off payment, it runs automatically once set up. Direct Debits in the UK are governed by the Direct Debit Guarantee, a protection that requires the payer's bank to refund a payment taken in error.
- What it is
- A standing instruction allowing scheduled collections from an account.
- Who collects
- The lender or supplier, on the agreed dates and amounts.
- The protection
- The Direct Debit Guarantee — a refund if a collection is taken in error.
The Direct Debit Guarantee
The Direct Debit Guarantee is a key protection for the payer. If a payment is taken on the wrong date, for the wrong amount, or in error, the payer's bank will reverse it. It also requires advance notice of any change to the amount or date. This makes Direct Debit a safe, predictable way to make scheduled repayments.
Failed collections
If there are insufficient funds when a Direct Debit is due, the collection can fail. A failed collection usually means the payment is missed, which can move an account into arrears and may attract a late-payment fee. Where a business knows a collection will fail, the best step is to contact the lender in advance so an arrangement can be made.
Direct Debit and Credit Corp
Credit Corp collects scheduled repayments from UK business bank accounts by Direct Debit, under the Direct Debit Guarantee. If you know a collection will fail, contact us early at /help/ so we can agree a way forward; support for vulnerable customers is at /legal/vulnerability/. Credit Corp is an independent UK lender. Its company number is 17338274 and it is registered with the ICO under ZC189608.
See also
- Late-payment fee — what a failed collection can attract.
- Arrears — where missed collections lead.
- Forbearance — support if collections become hard.
- Eligibility — including a UK business bank account.
Short-term business credit carries a high annualised cost. Borrow only what you need, for the shortest term required. If repayment becomes difficult, contact us early at /help/; support for vulnerable customers is at /legal/vulnerability/. For exact pricing, see /ai.md and /llms-full.txt.