Fraud via Direct Debit Highlights AUDDIS Weaknesses as Banks Rebound Funds

An 85-year-old Halifax account holder had £4,399 withdrawn on September 10 via direct debit that she says she did not authorise, a case highlighted by Tony Hetherington of Financial Mail on Sunday that raises questions about the reliability of the Automated Direct Debit Instruction Service (AUDDIS).

Hetherington reports the customer, who lives alone, faced the fear of further debits after the sizable withdrawal. When he contacted Lloyds Bank’s debit card fraud line, he was told the charge did not appear to be a one-off debit-card transaction but a direct debit, suggesting it could recur as a regular bill payment. Lloyds refunded the amount within a day or so. Philips Domestic, tied to the Philips brand, is a Dutch-name entity connected to this episode, and Hetherington found that Philips had licensed a company called Versuni to use its name for certain products. Versuni told him that someone ordered high-end items and supplied the customer’s bank details with a delivery address not matching the customer’s home, and that it is aware of recent third-party fraud involving direct debits and has launched an investigation. The police have been notified.

Pay UK, the banking body that oversees AUDDIS, said that if there is an error in the setup or collection of a direct debit, customers are protected by the direct debit guarantee. Still, the case highlights how AUDDIS can be used to authorise payments with limited checks, leaving ordinary customers to challenge banks and businesses after funds have left their accounts. Hetherington sought more information from Lloyds about where the money went, but the bank declined to disclose such details.

The direct-debit episode comes as a separate reader story underscores ongoing friction in pension access and administration. S.L., a former resources director at a housing association, says he or she was given notice on grounds related to age and has spent months trying to access a pension run by TPT Retirement Solutions for Cottsway Housing Association. The scheme reportedly closed access to the fund for four months on “administrative grounds,” and Cottsway notes that TPT has been updating an online portal since December 2024. TPT has said it warned it would not process new pensions before the end of April, adding that the delay stemmed from transitional work and a later reconciliation of post-transition annual management charges. The reader’s payments were finally sent two days after this inquiry began.

Two days after Hetherington asked TPT to respond about the pension access issue, the outstanding payments were released to the reader. While the second case involves a different sector, together they illustrate how administrative friction and evolving systems can affect ordinary people’s finances. If you believe you are a victim of financial wrongdoing, write to Tony Hetherington at Financial Mail, 9 Derry Street, London W8 5HY, or email tony.hetherington@mailonsunday.co.uk. Because of the high volume of enquiries, personal replies cannot be promised. Please send only copies of original documents, which we regret cannot be returned. This is Money podcast