I was reconciling my bank statement a few weeks ago and discovered that the new electricity provider I had switched to was taking a direct debit for the amounts due AND a second direct debit for an amount which had nothing to do with me. I’ll save you the details of the tortuous process of trying to contact both the bank and the electricity provider involved, but I will share with you an excerpt from the final communication from the bank:

” Since 2014, when SEPA ( Single European Payment Area) took over managing these type of payments, the banks no longer hold the mandate for a direct debit, leaving the agreement between the customer and the creditor, so once the mandate is presented to the account we will facilitate it. This is not monitored as the bank is not provided with a mandate when you create a direct debit with a company. “

In plain English this means that anyone who presents a direct debit mandate to the bank, the bank will satisfy it without checking whether you authorised it. They’ll ask you for lots of information before giving you the time of day, but they’ll hand your money out to anyone who wants it!

By complete coincidence, I went on to pay my daughter’s college fees in another european jurisdiction online a few days later. The only payment option was for me to enter my IBAN. No checks of any type were performed. I could have entered anyone’s IBAN.

The story with the electricity company moved on to the bank refunding my money after I filled in a few forms. I thought that was it, but MY bank then sent me a letter saying they would check back with the electricity company to see whether the direct debit was valid and if so they would charge the money from my account.

Beware of pick pockets, facilitated by the law, assisted by the banks. Check your statement regularly