How We Caught a Major Error In Our Bank Account

24th January 2017

Recently, a new client of ours made an error when sorting out their direct debits.

The business owner was filling out forms for various insurance products, but picked up our bank details by mistake, instead of his own. So, while he put his company name on the forms, he assigned all the direct debits to Insight Associates.

The first we heard about it was just before the debits were due to go out. We check daily that what is coming in and out of our account is consistent with our expectations – a service we perform for all our clients as well.

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Looking at the forward transactions, we noticed a group of direct debits which we didn’t recognise were due to come out the next day.

It took a while to figure out where they came from, and sort it out. But once we did, naturally, I wanted to know how this possibly could have happened.


I met with the bank’s area senior commercial manager, who told me frankly: “All too easily”.

Shockingly, the bank has no process for checking the signature on a mandate, and the burden of proof to get it right is with whoever sets up the direct debit.

The good news is that there is a direct debit guarantee. So if money is mistakenly taken out of your account you should get it back.

But that only happens if you actually check what’s going out of your bank account.

The lesson we learned from this? Keep a close eye on your direct debits to make sure they all “belong” to you. That’s something we now do monthly for all our clients, since we discovered the weakness in the system.

If you don’t recognise a transaction you should always raise a query with a bank. If you do cancel it, you can always reinstate it later, if it does indeed turn out to be legitimate.

But most importantly: Never rely on your bank to check everything is right with your account.
It is up to you to monitor it, and ensure everything is in order.

As I said, we perform that service, daily, for all our clients – and catch mistakes the entire time!
The key lesson here is you cannot rely on your bank to check everything is correct with your account.
The burden is on you to double-check.

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