To become a Direct Debit originator, you need to 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.
Perform modulus checking of sort code and account number combinations at point of entry.
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 originators 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). 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'.
To ensure the accuracy of the Direct Debit collection, when using Automated Direct Debit Amendment & Cancellation Service (ADDACS), you must apply DDI amendments and cancellations immediately, or within 3 working days from receipt, or as specified by the paye. 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 when an incorrect Direct Debit being applied to an account. You must settle an indemnity dlaim within 14 working days of the date of the claim.
Don't ignore prompts within the software for updates. Service users must update sort code databases and applications on a monthly basis to ensure that up-to-date information is used.
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