FWIW and written as a Direct Debit Originator:-
Under the Direct Debit Guarantee the payer can require a refund from his bank and does not have to prove any wrongdoing on the part of the payee. The payee is then OBLIGED to refund the payer's bank. This results from a "simplification" of the rules, which I found out about the hard way when a customer who'd paid by DD claimed a refund from his bank, who I had to refund. There was nothing wrong with the goods and he hasn't returned them. We're now having to take him to Court to get payment.
From your point of view you are more secure with a DD because your bank will refund you on request.
10% is a ludicrous additional charge. However for a club with 1000 members the savings by automating payments are significant and some cost difference is justified. In my case we bill customers for phone calls on a monthly basis and there is a charge of £4 for each invoice not paid by DD. That is a fairer reflection of our additional cost because the administration cost to us is per transaction, regardless of the amount involved. Those who pay by DD get a saving that reflects the saving to us of getting payment on time and reduced admin.
Similarly on support contracts we have an annual charge but it can be paid quarterly by DD at no additional cost to the customer.
Think about the cashflow implications:-
500 contracts at £200 is £100,000
If paid annually in advance you have on average 6 months worth in hand, i.e. 50k
If paid quarterly in advance you have on average six and a half weeks worth in hand, i.e. 12.5k
Quarterly DD therefore requires an extra 37.5k of working capital but it's worth it to us because of the savings in administration.
I hope you can see from the above that your outrage, while understandable, results from a simplistic view. Administration costs have to be passed on to the punter and if you can reduce them then you can provide better value to your customers.