How to protect yourself from direct debit fraud

Ever scanned your bank statement and experienced that unsettling moment when you spot a direct debit you don’t recognise? That’s direct debit fraud, and it happens when a criminal sets up a direct debit using your details.

These kinds of scams are surprisingly common, and with our busy lives, they can be easy to miss. In this article, we’ll explain how direct debit fraud happens, simple ways to look after your money, and what to do if you spot something suspicious.

How direct debit fraud happens

It all starts with fraudsters getting hold of details like your:

Name
Address
Name of your bank
Sort code
Account number

Using these details, they can set up a direct debit from your account without you knowing. But how would someone get hold of that kind of information?

There are a few ways fraudsters can get their hands on your info – some are obvious, like physically pinching your wallet, phone or even digging through your rubbish! But one of the sneakier tactics is known as ‘social engineering’. This is a frustratingly effective way scammers trick you into sharing personal information.

They might pretend to be your bank, HMRC, the police, your broadband provider or a well-known company – and they’ll often create a sense of urgency to pressure you into acting fast.

Common scam tactics

Scam phone calls: this is when someone pretends to be your bank or a company you trust. They’ll push you to act fast, usually by claiming your account’s at risk and asking for sensitive information. At Monzo, we have a Call Status feature, which lets you confirm if it’s really us you’re speaking to on the phone – it helps customers report around 800 fraud attempts each month! Some banks, including Monzo, are also covered by the 159 hotline – an emergency number you can call to report financial scams. When you ring 159, they’ll ask for the name of your bank and connect you to them.
Phishing emails: not the rod-and-reel kind – these emails want to hook your personal information. They pretend to be from a real company to lure you into clicking a fake link or handing over your information. One classic? A job offer from a fake recruiter asking you to update your details.
Smishing texts: smishing is like phishing, but over text or WhatsApp. You might get a message about a parcel delivery or a ‘problem’ with your bank account – all designed to trick you into tapping a dodgy link or calling a premium-rate number, and sharing your details.

Once they’ve got enough information, fraudsters can then try to set up a direct debit in your name.

How to reduce your risk of direct debit fraud

A few smart moves can go a long way when it comes to spotting and preventing direct debit fraud:

Use strong, unique passwords

So no birthdays, pet names or ‘password123’. A password manager makes life easier by creating, auto-filling and saving super strong passwords for you. Only you can unlock everything with a special master password.

Keep a close eye on your account

Spotting direct debit fraud is much easier when you’re in the loop. Our instant notifications tell you the second money leaves your account. You can also see all your direct debits and scheduled payments in one clear list in the Monzo app – perfect for quickly catching anything that doesn’t look right.

Think you’ve been a victim of direct debit fraud?

If you notice something unusual, here’s what to do straight away:

Contact your bank: as soon as you see a payment you don’t recognise, get in touch with your bank. They can cancel it and help you get your money back through the direct debit guarantee. This is a protection scheme that all registered banks and building societies must offer, which covers you if something goes wrong with a direct debit. (More on that in our FAQs, later in this article.)
Report it to Action Fraud: report the scam at actionfraud.police.uk or call 0300 123 2040. Action Fraud will collect all the intel you have, and pass it onto the National Fraud Intelligence Bureau for investigation.
Change your passwords: if you think your details have been compromised, update your main passwords and PINs straight away, especially for your bank, email and anything else linked to your money.
Check your credit report: keep an eye out for anything unusual, like a sudden drop in your credit score. Fraudsters will sometimes use stolen details to open new accounts in your name.

If there’s one thing to remember out of all of this? Always give yourself time to think, and trust your gut if something feels off, like you’re being rushed into sharing details, or get a call or text that doesn’t sound right.

Direct debit fraud can happen to anyone, but by taking a few simple steps, you can help ensure it doesn’t happen to you.

Questions? Answers.

How do I cancel a direct debit in Monzo?

You can cancel a Direct Debit in just a few taps in the Monzo app:

Head to the ‘Payments’ tab
Tap ‘Schedule’
Pick the direct debit you want to cancel, then hit ‘Cancel Direct Debit’

To be on the safe side, it’s best to do this at least one full working day before the payment’s due.

Can someone set up a direct debit without my permission?

Not legally – direct debits should only be set up with your permission, but fraudsters can sometimes still manage it by using stolen personal details. That’s why it’s so important to protect your information and keep a close eye on your account.

What’s the direct debit guarantee?

It’s a protection scheme that covers you if something goes wrong with a direct debit. All registered banks and building societies that offer direct debits have to follow it. Here’s what it means for you: You should always get advance notice if the amount, date, or frequency of a direct debit changes If there’s a mistake by the company or your bank, you’re entitled to a full and immediate refund You can cancel a direct debit at any time by contacting your bank or building society

What’s a direct debit refund scam?

This is when fraudsters offer to help you claim fake refunds on your direct debits, often through social media or ads. They’ll ask for your bank details, then use them to request a refund from your bank. If it goes through, they take a cut as their ‘fee’. But here’s the catch: the refund isn’t real, and you’ll still owe the money to the original company. So you’ll lose the payment and whatever the scammer took.

UK residents only. Ts&Cs apply.