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Direct Debit Best Practice

Key Requirements

• Obtain prior approval from your sponsor for all documentation you intend to use within the Direct Debit scheme.

• Allow at least four weeks between the setup of your SUN (Service User Number) with Bacs and the lodgement of your first DDI (Direct Debit Instruction) with the banks.

• Implement modulus checking of sort code and account number combinations at point of sale if you are a paperless Direct Debit (DD) user.

• DDIs must not state the amount, date or frequency of collections as they must be variable.

• Allow at least 10 working days after lodging the DDI before presenting the 1st collection (unless otherwise agreed) and at least 5 workings day before you collect Direct Debits from a payer's account.

• New DD service users must use AUDDIS (Automated Direct Debit Instruction Service) and a core reference of 6-18 alpha-numeric characters on a DDI, which must then be included on all DD collections for that customer.

• Advance Notice must be given to the payer of the DD date and amount before the 1st Direct Debit is collected, and in future if the due date, frequency or amount changes.

• Unpaid Direct Debits are normally returned by the Paying Bank via the Automated Return of Unpaid Directs Debits service (ARUDD) and returned items are debited to your account on day 5, or in exceptional circumstances, day 6 of the cycle. All returned unpaids will include a 'reason code'.

• Using ADDACS (Automated Direct Debit Amendment & Cancellation Service), you must apply DDI amendments and cancellations immediately, or within 3 working days from receipt, or as specified by the payer, to ensure the accuracy of the Direct Debit collection. Ensure you keep an audit trail of ADDACS code messages in order to respond to indemnity claims raised.

• An Indemnity Claim is a claim made by the paying bank about an incorrect Direct Debit being applied to an account. You must settle an Indemnity Claim within 14 working days of the date of the claim.

• Don't ignore prompts within the Albany software for updates - Albany products contain modulus checking tools and will either automatically update or prompt you to do so using a wizard. Service users must update databases or applications that use sort code information monthly to ensure that up-to-date information is used.

The Direct Debit Guarantee

• The Guarantee is offered by all banks and building societies that accept instruction to pay Direct Debits
• If there are any changes to the amount, date or frequency of your Direct Debit the organisation will notify you (normally 10 working days) in advance of your account being debited or as otherwise agreed. If you request the organisation to collect a payment, confirmation of the amount and date will be given to you at the time of the request.
• If an error is made in the payment of your Direct Debit, by the organisation or your bank or building society, you are entitled to a full and immediate refund of the amount paid from your bank or building society.
  • If you receive a refund you are not entitled to, you must pay it back when the organisation asks you to
• You can cancel a Direct Debit at any time by simply contacting your bank or building society. Written confirmation may be required. Please also notify the organisation.