What happens if my Direct Debit fails?
A Direct Debit can fail for several reasons — insufficient funds on the day, a recently cancelled mandate, a change at your bank, or a fraud-prevention block. Whatever the cause, a failed Direct Debit is treated as a missed payment until the amount is settled.
What we will do
When a Direct Debit fails, our payments team is notified the next working day. We will normally:
- send you a notification by email and/or letter;
- attempt to contact you by phone during office hours so we can agree a way to clear the missed payment quickly;
- hold off on any further collection attempts until we have spoken to you, where reasonable.
Any fees or charges that may apply are set out in your Business Loan Agreement — we will never apply a charge that is not in your agreement. We would always rather agree something sensible with you than apply a charge.
What you should do
If you know in advance that a Direct Debit will fail — for example a customer payment to the company has been delayed — please use the Payment Extension form on our Forms & Requests page before the due date. We can usually agree a short extension or move the collection date so the Direct Debit does not fail in the first place.
If a Direct Debit has already failed:
- Check with your bank in case the cause was at their end (a card replacement, a fraud block, or a paused mandate).
- Pay the missed amount as soon as you reasonably can — by debit card on the Make a Payment page, or by bank transfer using the details on your statement.
- If you cannot clear it in one go, ask for a Payment Arrangement using the form on our Forms & Requests page.
Repeated missed payments can have a knock-on effect on the company's business credit file — another reason to keep us in the loop early. Free, independent advice for businesses is available from Business Debtline (businessdebtline.org, 0800 197 6026) if you would like to discuss the company's wider position.