Direct Debit Training and Consultancy, Guarantee, News stories, Scheme Rules
Bacs, Consultancy, Direct Debit, Guarantee, News, Paperless Direct Debit (PDD), Reports, Training, Uncategorized
06, FEB 2015

Over the Christmas holidays I purchased a gift for a family member of a magazine subscription.  It was gratefully received and we were both happy.  Afterwards however,  when I received a confirmation letter with details of my Direct Debit payment schedule, I noticed several errors in the Direct Debit process – one of which was that the organisation were using the wrong Direct Debit Guarantee in their correspondence!  It made me wonder how many other organisations might be unaware they are not complying with the Direct Debit Rules!

The organisation were right to provide me with a copy of the Direct Debit Guarantee.  The Bacs rules are very clear that a payer using a paperless sign up method must receive the Guarantee as part of the confirmation / advance notice letter – as they won’t have received it as part of the Direct Debit Instruction process (I signed up on line).

This is a copy of the Direct Debit Guarantee that I was posted as part of the confirmation letter:  

Incorrect DD Guarantee
Incorrect DD Guarantee

Unfortunately this version is out of date! It was actually withdrawn in  2011 and the various different versions of text were replaced with one single approved version of the Direct Debit Guarantee – see below for an example of this.

Correct DD Guarantee
Correct DD Guarantee

As you can see the approved version of the Guarantee ends with the sentence ‘Please also notify us’.  If the version you are using ends with any other phrase – such as the one I received above – then it is not correct.  This is because it is not permitted for Service Users to vary the wording in any way, only to insert into the Guarantee, the relevant details that relate specifically to their organisation.

Other issues I noticed here were the size of the Direct Debit logo.  In the example I was sent it is smaller than the requirement laid out in the Direct Debit Scheme Rules.  Also, it is important that the organisation name that appears in the Direct Debit Guarantee is the registered name of the Service User – which is not necessarily the trading name or the name which will appear on the bank statement of the payer.

But, is it important to use the correct version of the Direct Debit Guarantee?  Well ….yes, it is!  The Guarantee and the unique reassurance it offers payers versus other payment methods (e.g. credit card payments that have no such Guarantee) is one of the key reasons that the Direct Debit Scheme has been successful.  If the organisation uses an incorrect Guarantee it reflects badly on both them and the Scheme.

So, make sure your organisation is up to date with the Scheme Rules.  We offer Training and or Consultancy to enable you to review your knowledge and processes and if you have any questions, please just get in touch.