Can a company refuse to accept payment by a specific bank?

I’ve been told by someone who was getting an insurance quote they were told that they would not accept Starling bank and revolut was mentioned as well. This was to setup a direct debit.

Is this actually allowed and should they make a complaint?

Unlike payment card symbols, there is no guarantee of universal acceptance with a direct debit.

Seems pretty arbitrary tho. Do they accept payment by BACS? If so a workaround would be to just set up a standing order.

It seems they only use direct debits. I’m going to get them to raise it with Starling and then make a complaint with the insurance company.

I suppose they don’t have to explain or justify it but I’d like to see what they say.

This used to happen with Monzo a lot, less so these days. I think it’s more to do with the systems not validating the sort code rather than anything else.

In some instances, calling and getting them to “override” the system fixed it.

I think they CAN do it, though they morality of it is questionable.

I don’t think it has anything to do with this as such. Either their payment system accepts the sort code or it doesn’t.

Now that Monzo etc are more established (as are Revolut//Starling) the 04-xx-xx sort code is starting to become more accepted and less of an issue, at least in my experience.

Pretty sure they can but, at the cost of your business. I’d file a complaint and tell them to eat shit if they won’t accept your DD.

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Found out a bit more. They had paid for insurance with this company before via direct debit with Starling!

When it wouldn’t work online this was explained to the person on the phone but they said they don’t accept banks like Starling anymore :joy:

Also Starling did respond and just said there’s not much they can do and they’re going to forward it to another team. I’d be happy with them just asking this company why but maybe they will.

Isn’t this similar to what eBay doing for all non FSCS protected accounts when you try to add them to seller account. Someone also said they refused Starling simply because it is an online bank even though it is FSCS protected

My Ebay revenue goes in to a Revolut account.

I deliberately kept it away from actual banks because there was a glut of stories of people having their accounts closed due to misuse around the time Ebay started phasing out PayPal - banks mistaking Ebay deposits for business activity.

Set the direct debits up off a dud account then CASS over lol

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Yep, that’s the workaround.

Businesses certainly will discriminate against sort codes. Even if their systems can technically accept them. It’s part of their risk assessment and is usually only ever a factor.

Barclays, for instance, have been fine with me using Monzo for things, but I know folks who have been declined loans or credit cards because Monzo is their main bank account, and other instances where folks are approved but aren’t allowed to use those accounts for direct debit or repayments.

Its bizarre, but when their threat models are designed on the presumption you’re more likely to be a money launderer or fraudster if you’re a customer of one of these banks, I can understand why it happens.

How would they ever know such a thing? No bank is going to reveal details of their proprietary credit scoring algorithm.

I suspect somebody has put 2 and 2 together and come up with a potentially erroneous result.

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I think they changed along the way, on the forum people with online accounts including Revolut can not add them for payment purposes, the cards are accepted for charges. I tried with my Wise personal and business accounts both declined, Tide declined, tried Kroo with FSCS still declined.
Ebay Customer service personnel I contacted were all useless. They sent me links for online banks they support but they were all for USA

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We should probably make companies accept any UK regulated institution if they will accept one.

We should also require card networks to process payments for any lawful activity.

It’s not related to credit scoring, and because Barclays do tell you.

It happens both with Barclays Partner Finance (this includes Amazon instalments and the iPhone upgrade program; the latter of which has affected many of my friends) and mortgage applications.

In addition to the hundreds of user reports over the years such as these:


a mortgage broker finally lodged a formal complaint this year:

It doesn’t happen to everyone though. I’ve never had any problem getting finance from Barclays whilst I’ve been with Monzo and used it for my direct debit. Likewise one of my friends who wouldn’t be able to proceed with their Monzo account used an old Barclays account for it and switched it into Monzo, which got around it.

… so not a risk thing then? Just an arbitrary ‘our computer won’t accept that sort code range’?

No because the computer does accept the sort code. Otherwise it would happen to everyone; it doesn’t.

I know first hand, that at least in the case with Barclays, the decision to reject certain applicants who apply using an internet bank account is very much a risk assessment thing.

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I’m baffled as to how that isn’t the same as assessing credit worthiness but OK, I’ll take your word for it.

All banks will be digital or internet banks very soon which makes it even more ridiculous.

I’ve never dealt with this myself but I would happily go elsewhere if I was told they don’t accept Starling.