ADDACS, Bacs, Direct Debit, Reports, Training
29, FEB 2016

When it comes to managing changes to a Direct Debit, such as cancellations or amendments, you may not realise how flexible the Direct Debit scheme is.

Continuity of payment is key to many business and up there with ‘retaining custom’ in terms of importance.   So when advised of a Direct Debit Instruction (DDI) being cancelled or needing an amendment it’s extremely important that the next steps of the process are well managed to avoid disruption for the customer and the business alike.

What can help is that the scheme does allow the reinstatement of a Direct Debit. The rule is that it must however, have the ‘payers’ consent to do so and can only be used in the case of the cancellation of the Direct Debit being prompted by the ‘payer’ (ADDACS – reason code 1).   Reinstatement is not permitted where the DDI has been cancelled by the paying bank using ADDACS reason codes 0, 2 or B:-

0 -The DDI has been cancelled by the paying bank
2 – The customer is deceased
B – The account is closed

There are two types of ‘consent’ permissible as evidence, should the reinstatement be disputed:

  1. A new DDI from Payer – the Payer provides a new signed or Paperless DDI
  2. Written permission from Payer – confirming a cancelled DDI may be reinstated.

With reinstatement being possible, a Service User can take prompt action to get a payer back on board with their direct debits.

What are ADDACS Reports?

The Direct Debit scheme provides important advice for Services Users on Amendments and Cancellations to direct debits. The advice is titled an ADDACS report (Automated Direct Debit Amendments & Cancellation Service). The ADDACS, (along with the AUDDIS and ARUDD) must be actioned within 3 days of being made available to the Service User.

These and other Bacs advices are available for download via a dedicated website: (secure login details are required).  Remember – if you use a Bureau to submit your files these reports are usually made available for you.

Why is the 3-day rule important?

The Service User is being advised of a change by the payer or the payer’s bank. If, for example, related to a change in bank details, whether from an old to new bank (ADDACS – reason code 3) or simply a branch change (ADDACS – reason code C), then it’s a rule that the Service User takes the appropriate action immediately, or at least within three days, to avoid a failed collection due to incorrect bank details. Worst still, if advices are ignored, this could affect your payer’s payment cycle turn possibly lead to poor customer relations and if frequently, certainly contact from Bacs!

Do you have questions about reinstating a direct debit?  Contact us for more information.

Scheme Training – for more on this topic and to book our Accredited Direct Debit Scheme Training , see our up and coming regional courses or click here.