The Direct Debit Process in Spain: Everything You Need to Know
Direct debits are a simple and convenient way to automatically pay recurring payments. In Spain, like in many other countries, direct debits are a popular and common way of paying utility bills, taxes, rent and healthcare payments.
However, although common, the direct debit process in Spain differs from that in other countries, especially when it comes to changing banks. The process can be time-consuming and difficult if you’re not used to it.
In this article, we’ll discuss the key points of direct debits in Spain and how Bueno can simplify the entire process for you.
What Is a Direct Debit Mandate and Do You Need to Sign One?
A direct debit is an agreement between you, your service provider and your bank. You’re allowing the service provider to automatically withdraw money from your account to pay your recurring bills. In order to set up a direct debit with your bank and a service provider, you’ll need to sign a direct debit mandate. This mandate will include details such as:
● Name
● Bank account number (IBAN)
● Reference
● Payment amount
● Frequency (monthly, quarterly, yearly)
● Start date
This legal agreement proves that you allow the agreed-upon funds to automatically come out of your bank account at the specified frequency. In many cases in Spain, a direct debit will be the only method of payment available. This includes utility bills, social security payments and private healthcare subscriptions.
What Are the Pros of Setting Up a Direct Debit in Spain?
There are several reasons why direct debits are the norm for recurring payments in Spain. These include:
● Anticipating Expenses. You can easily plan for any upcoming payments with a direct debit.
● They’re Simple. You don’t have to remember to pay your bills every month, they’re set up so there’s very little for you to do (although you do need to make sure you have sufficient funds).
What Are the Cons of Setting Up a Direct Debit in Spain?
● There’s Not Much Control. Generally speaking, in Spain, it’s the utility provider that sets the date of the payments. The date they pick may not be ideal with regard to salaries and other payments.
● Account Balance. You need to be on top of your account balance to ensure you have sufficient funds for all the direct debits set up. If you don’t, you may have to pay additional fees.
Can You Make Changes to a Direct Debit in Spain?
Making changes to a direct debit in Spain is where things get a little more complicated. Details such as names, addresses and phone numbers can usually be changed in the company’s online portal. In some cases, utility companies such as Iberdrola, allow you to change bank details there too.
In other instances, you may have to sign a form to make changes. Don’t be surprised if your service provider only requires you to phone them up to make changes to your direct debit. They’ll likely record the conversation as proof of any changes.
It really gets time-consuming when you want to change bank account details (unless it’s with one of the few companies, like Iberdrola, that lets you do it online). In the UK, for example, banks switch direct debit payments automatically once customers have given them notice.
In Spain however, the customer will have to share precise documentation such as files and screenshots of all direct debits, for the bank to make the switch. And, even then, it isn’t a guarantee. In some instances, the company may not want to deal with just the bank and they’ll require the customer to contact them directly. So, as you can see, it can be quite a hassle for the customer and may contribute to their reluctance to switch banks.
How Bueno Can Help You With Your Direct Debits
At Bueno, we know how difficult banking can be for expats. We understand that different customs and a foreign language can lead to mix ups that can be time-consuming. That’s why we offer a dedicated service designed to help you easily and quickly transfer your direct debits to your new Bueno account. You’ll speak to a personal consultant who’s fluent in over 8 languages, and who will happily make the switch for you or guide you through the process.
You’ll simply need to download payment receipts from the direct debits in your existing bank (these will include a customer reference number which we’ll need to make the switch). In some instances, we may also need a utility bill or contract. We’ll ask you to sign a document allowing us to request to make the changes for the direct debit on your behalf. Your consultant will contact the companies and request the change. Simple.
Although, we are still talking about direct debits in Spain, so it’s not always that simple. Some companies will only let the customer make the change. But, if this is the case when you open your account with Bueno, our experts will guide you through the whole process to make it as easy as possible.
How Long Does It Take to Update the New Details?
Most companies will update the new account details as soon as they are requested. However, if a payment is due shortly after the request is made, they may not register the changes until afterwards. It’s therefore important to keep an eye on your accounts to ensure you’re being charged the appropriate amount.
Ready to Make the Change to a Bueno Account?
Transferring direct debits isn’t always a straightforward process in Spain. But it’s not a reason to stay in your existing bank if you’re not happy with the conditions. There are so many benefits to changing to a Bueno account, including personal consultants who speak your language, no hidden costs or fees (which is often the case with standard banks) and an online account that you can use wherever and whenever you want!
To make property banking even easier for you, we also offer a personal service to help you switch over your direct debits. We’ll help you manage your property finances so you can concentrate on enjoying your home in Spain! Get in touch with the team at Bueno and benefit from our unique approach to property banking and solutions.