Require banks to allow customers to set maximum caps on Direct Debit payments

Background

Amend the Payment Services Regulations 2017 to require banks to provide a "Customer-Defined Cap" for Direct Debits. If a withdrawal attempt exceeds this cap, the bank must automatically block payment and notify the customer. Payment should only proceed when authorised and a new cap is set.

Additional details

Current rules allow organisations to vary Direct Debit amounts with minimal notice, often too late for customers to act. For services like energy and water, estimated increases can often be overcalculated, causing financial hardship. We believe this proposal ensures: Protection: Customers are shielded from large or erroneous withdrawals. Transparency: Organisations must provide clear calculations for any increase. Control: Customers must approve increases or cancel before funds leave their account.

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