By Editor,Tony Hetherington

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Tony Hetherington is Financial Mail on Sunday’s ace investigator, fighting readers corners, revealing the truth that lies behind closed doors and winning victories for those who have been left out-of-pocket. Find out how to contact him below.

Ms J.K. writes: I am the treasurer of a village charity.

We have a Lloyds Bank account and in July last year I found a direct debit had been set up by Scottish Power, with £53 taken from our account.

However, we have no premises or utilities and have never set up any such direct debit.

Tony Hetherington replies: Last week I reported that an 85-year-old pensioner had seen £4,399 vanish from his account at Halifax, which is now run by Lloyds Bank. Again, this was an unauthorised direct debit. I intervened and the bank immediately replaced the missing money. It has since made a goodwill payment of £75 to the pensioner.

Lloyds explained that the transfer from his account had been made using the Automated Direct Debit Instruction Service – AUDDIS – which allows businesses to tell your bank that they have your approval, and the bank simply hands over your cash.

There is no check to see that the customer ever signed a direct debit agreement and if anything goes wrong, it is up to the customer to try to reclaim the cash from the bank.

The £4,399 payment turned out to be part of a wider fraud. But your village charity has not been defrauded. It has simply become a victim of the AUDDIS system itself.

When £53 was taken by Scottish Power, you protested and Lloyds put the money back in your charity’s account. The bank said it would contact Scottish Power but in September last year another £58 vanished from your account. Again, the bank replaced the money and said it would speak to Scottish Power.

Well, it didn’t. In January, Scottish Power pocketed £163. This time, you complained to both the bank and Scottish Power. The money was replaced, only to be taken again in February. In April, the bank told you: ‘The direct debit is now cancelled and we have added an indicator to your account which should prevent any new direct debits being set up without your authorisation.’

Well, it didn’t. In May, Scottish Power raided your charity’s account again, taking £460. At this point you contacted me, and Lloyds told me the bank industry’s AUDDIS scheme trusts companies to dip into customer’s accounts without signed consent. It was up to you to sort this out with Scottish Power, the bank added. I questioned Scottish Power too and it said it would discuss the payments with you. After some time, it found it has a business customer with a bank account number one digit away from your own. The customer provided your account by mistake, it added. By now it was August, and Scottish Power offered its apologies and an assurance that the bank details had been corrected.

They hadn’t. Another £760 disappeared from your bank account into the coffers of Scottish Power. It denied having any record of complaints from you or Lloyds Bank, before I first alerted its staff.

When I provided chapter and verse of when complaints were made, it found them, saying: ‘We are incredibly sorry for the issues Ms K has been facing and have reached out to her to apologise.’

The final £760 has now been returned to your account, and Scottish Power is sending a further £400. Lloyds Bank has also made goodwill payments to your village fund.

AUDDIS is a flawed system. It relies on bank customers to spot fraudulent or mistaken direct debits. I invited Pay UK, the body which oversees AUDDIS, to comment but there was no reply as we went to press. It’s only customers’ cash at risk, after all.

If you believe you are the 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 given. Please send only copies of original documents, which we regret cannot be returned.