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Comment by londons_explore | Hacker News Reader

This varies country to country. In the UK, direct bank withdrawals (via Direct Debit) are guaranteed forever. Ie. in 30 years time you can reverse a transaction from a company and get all the money instantly, even if the company no longer exists.

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How does it work if the account is closed, company out of business etc? Does the bank eat the amount? if so, seems easy to abuse.

The bank (or transfer provider) eats the amount. And yes, it gets quite some abuse. It's especially abused against gas and electric providers when they've gone bankrupt since people tend to have paid those companies tens of thousands over many years, and when the provider has gone bankrupt it's unlikely they'll provide any evidence to dispute any chargeback.

Though as a point of interest my small UK-based B2C has seen significant abuse of card chargebacks (i.e., chargebacks issued against legitimate charges and the banks rejecting our dispute) but never a single abusive reversal under Direct Debit, even though in theory the Direct Debit has that indefinite liability attached. I suspect this is because in practice you can issue a chargeback because you didn't like the way someone sneezed and a lot of banks will uphold it while you normally have to give a valid reason to reverse a Direct Debit transaction.

Probably because you can't dispute for any reason. But if there wasn't enough notice. If you don't give 10 working days notice (unless initiated by the person). An immediate refund can be requested.

Bad service isn't a reason for a refund. And if the person doesn't say "This debit was in error. I wasn't given notice" or similar the bank will usually say this is a legitimate direct debit [0] https://www.directdebit.co.uk/DirectDebitExplained/pages/dir...

My bank doesn't even offer a dispute option in direct debit transactions.

you have to call them.

This bank and banking system specific. My bank (Canada) doesn’t offer any dispute option either.

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