I really hope someone has some good advice for you Newsom13- that is a terrible situation to be in.
My advice would be to first try and see someone at the Citizens advice Bureau...http://www.citizensadvice.org.uk/index/getadvice.htm

They can at least help point you in the right direction.
I hope that helps a little and good luck!

Newsom13, I think I may know the answer, but I am only 99% sure.
I bank with Santander and have never had a problem. However, I have heard one or two stories about Direct Debits not being paid by them. Whilst you have all these companies out there that do banking and have DDs paid to them, there are a miriad of account numbers. BUT, last year Orange and T.Mobile became one company, with T.Mobile the main name and company, in as much as using all T.Mobile bank accounts etc. At the time of the amalgamation, over 12 months now, a DD with Orange could be legitimate, but once they become one company it may not be a valid number.
A friend of mine had a Vanquis Visa card and was getting letters from Vanquis asking for payments, yet according to his bank they were making the payments and the transactions were on his statements to prove this. So on further investigations he went into the Vanquis website and got the details to set up a DD with his bank, at which point I told him to phone them up to double check the details. On doing so he was informed that that account number was no longer valid and gave him a new number. He then gave his bank this new account details to pay his Vanquis card and was told it was an old Barclays Bank number, of which Vanquis is part of, so they set up the DD and low and behold his DDs are getting paid on time.
Now the danger on setting up a Dd is this, if any details are wrong and the money goes to another company other than who you want, basically you have NO comeback or claim, it is your responsibility to make sure the details are correct. So treble check all account details and even ask if the account numbers have changed since joining up with T.Mobile. If this is the case, then you can force Orange into withdrawing the blotch on your credit report and making the amendments.

What George has said is very good advice, as I had some troubles when Halifax took over the Bank of Scotland or when they "merged" whatever you want to call it. Basically I believe it stems from the difference between banks and building societies as they are both run in slightly different ways and a building society uses an account number as well as a roll number and some building societies even have a different sort code for incoming and outgoing monies, I know this used to be the case with Yorkshire Building Society who I was also with.

In terms of sorting out your bad credit on getting a mortgage. Request a copy of your credit history from either Experian or Equifax or there is a company who do a free trial (which you can get through a cashback site) and then you cancel in thirty days after you have the information you require and before you get charged on your card and once you see your credit history, look for the bad bit and copy this, then write to both companies enclosing a copy of this and asking them if they will remove this blemish from your history or write an explanatory paragraph to include in your credit history for future reference. Neither company is obliged to do so, but when they understand that you have not in fact been guilty of any fraud or actual debt problems, they are usually more than happy to do so. A third thing you can do is take a note of what both George and myself have suggested, and use Kay's suggestion and go along to your local CAB armed with these possible solutions, and see what they can do there to set the wheels in motion with a solution to your problem. The CAB are completely free and voluntary organization whom one of our marvellous forumites works for, Ros, and they are really good at batting in your corner and keeping you informed of what they are doing and when and also getting results!

Do let us know how you get on, Newsom, and don't be shy. It is your right as a customer/consumer to have the best of service, remember it is a RIGHT not a favour!