Major Revision of Direct Debit Rules for 2017

In a meeting that we had with Bacs last year we were advised that the next revision to the Direct Debit Rules would be a major one. Not just a few amendments but a complete rewrite, including the order and layout. We had seen a few drafts previously but the final version of the Service Users Guide and Rules to the Direct Debit Scheme was published yesterday.

One thing we had hoped for in version 5.0 of the Direct Debit Rules was a smaller document.  There were 164 pages of rules in version 4.1.  The result in Version 5.0 is……..178 pages. Still plenty to work through then! We have reviewed the whole document and all the changes so hopefully you won’t need to read it cover to cover. Our courses have already been updated!  If you haven’t had training for a while then now is the best time.  You are welcome to come to us with any questions however that you have.

Some of the major changes in the 2017 Direct Debit Rules:

  • The first and most obvious change to the Rules is that they have been redrafted into a more logical flow.  They aim to recreate the journey from joining the scheme through to exit from the scheme and therefore information about AUDDIS and Paperless Direct Debits (PDD) are now incorporated into the Rules throughout, rather than being in separate sections of their own.
  • Perhaps the biggest changes to the rules this time around are in the area of indemnity claims, counter claims and challenges. These new rules are to take effect from February 2017. The changes do offer a few more safeguards to Service Users who feel as though they have done everything correctly but still receive a claim that they had to pay back. Previously any dispute about whether advance notice had been sent or received would always find favour with the payer and Service Users would have to chase any outstanding amounts with the Payer directly. There are now opportunities for the Service User to either challenge of counter claim when advance notice is disputed. This applies where evidence can be provided by the Service User.

Paperless Direct Debit

  • Another major change to the rulebook is an update to the approved methods of Paperless Direct Debit (PDD).  These now specifically include Pen & tablet devices (handheld, mobile data capture solutions, sometimes referred to as a Hand-Held Unit – HHU – or Personal Digital Assistant – PDA’s). This seems to be a clarification of an existing rule rather than a change to the rules. These devices would already have been fine to use provided the face to face sign up script was followed as normal.
  • Again what seems to be a major change is the use of Electronic signatures (e-signatures). Electronic signatures can now be utilised for Direct Debit Instructions (DDI’s), mainly where it has been identified that more than one person is required to sign the DDI.  The Rules also provide an overview of the process of how this should be achieved.

There is a slight issue here in that for both methods described above, all of the other Paperless DD rules still apply. This means that the use of PDAs and Electronic signatures could have previously been used anyway as they are only in addition to the current requirements. At first glance it is difficult to see that these changes/ clarifications have much positive impact on users. One advantage of using electronic signature is where more than one person is required to authorise on the account. We confirmed with Bacs today that this overrides the rule that currently states that if “more than one person has to authorise debits from the account a paper DDI must be sent to the payer for completion”.

Direct Debit Training

  • We are seeing further steps from Bacs to ensure that all Service Users have had sufficient training and are compliant with scheme rules. There is now mandatory on-line training for all new service users which must be taken prior to gaining access to the Bacs services. For all existing Service Users there is still a responsibility to keep up to date with these changes.  This is why we recommend accredited training every 3 years.  With this being the biggest update that we have seen for some time it may be worth looking at training sooner rather than later.

If you want to ensure you are up to date with the current Direct Debit Rules or if you have any questions about these changes, then please contact us.

Further details of our training are available on our Direct Debit Training pages

A full list of the amendments appears at the front of the revised Guide.  You can access your copy by going to www.Bacs.co.uk (either log-in or register and then follow the links to the latest version).