We have listed below a few of the most common questions regularly asked to us. The purpose of these FAQs is to give you a rough guide. They are not intended to be used as a substitute for the Rules and Regulations of The Direct Debit Scheme – which are very detailed and at times complex. You are strongly advised to familiarise yourself with the rules, a copy of which can be downloaded from the Bacs website or supplied by us upon request.
If you have any questions that are not covered in the FAQs below, please feel free to
Any Direct Debit scheme must be run strictly according to the rules outlined in the 161 page Bacs Service User Guide. The resources needed to comply with these rules both in software and manpower are both difficult to implement and costly to run. Add to this the fact that any deviation from these rules can result in losses to your sponsoring bank and you will understand why banks will only issue this facility to companies with whom they have a long and positive trading history.
We are generally happy to service new businesses as long as you are not operating in a high-risk field. With each application, we will carry out credit checks on all companies, their directors and shareholders.
Generally only a personal guarantee is required. If your business is new, operating in a high-risk area or has a poor credit rating, we may require a security deposit or wish to retain a small percentage of the funds collected on your behalf on a rotating basis.
In order to comply with regulations and carry out our KYC checks, we will require certified copies of a passport and proof of address for each director and shareholder. We will also require a copy of the company bank statement to comply with Anti Money Laundering regulations.
No, your customers can give you their bank details over the phone or online as long as you read them a pre-defined script and use bacs approved web pages, both of which we can provide upon request.
You must provide advanced written notification to your customers before debiting any payments from their account. We can provide you with a bacs approved advance notice letter template which can be posted or emailed to your customer along with their invoice. If you are going to take a recurring payment of the same amount over a set period of time, one advance notice letter will suffice detailing the full payment plan.
An electronic file, usually in excel or text format, containing the necessary bank and payment details of the accounts you want to debit.
You will upload the Direct Debit Submission File directly through our client portal.
Thankfully (almost always) not! Most accounting software packages have a feature for automatically creating Direct Debit files or exporting your data in a format that can be imported into our software.
Reports of any cancelled instructions will be sent to you by email within 24 hours of the cacnellation.
You will be notified within 24 hours of the collection that the funds have been returned unpaid (bounced), and any necessary reasons why. You will be able to resubmit the details to collect at a later date.
Your funds will clear in our account on the 3rd day after collection. We will transfer your funds to you by direct credit so they will hit your account 2 days later. We can send funds by same day CHAPS transfer for a small fee. Should you qualify for our “cash advance” facility, we can advance your funds immediately on the day they leave your customer’s accounts or sometimes even earlier.
All funds collected are held in a designated client bank account. A letter from our bank can be supplied to confirm this, should it be required. Should anything happen to these funds prior to them being transferred to you, you can simply ask your customers to raise an indemnity claim with their bank and the funds would be returned to them.
Your customers are guaranteed a full and immediate refund of any funds collected erroneously from their account by Direct Debit.
Without overloading you with information there are 3 important direct debit guarantee rules you should know about. With this information you can understand what direct debit guarantees your customers are entitled too.
The main direct debit regulations that you must be told about are changes to the amount that will be taken along with any changes in frequency or date.
It is possible to agree a notice period with a merchant but if no time period is agreed the default will be 10 working days. If whatever reason you are not given the correct notice period then a full refund can be claimed.
The second direct debit rule you should know about. An “indemnity claim” can be made from your bank for any payment taken in error, also known as a full refund.
The final direct debit rule you ought to know is that you can cancel a direct debit any time before the payment is due to be collected. If you have cancelled a payment and the funds are still taken you are entitled to an immediate refund.
If the direct debit payment is taken in error then your customer will be entitled to a full and immediate refund. To claim a refund they can;
1. Contact their bank on the phone or in writing and simply ask for a refund.
2. If this fails they can write and escalate to a Customer Service Manager or a Branch Manager and refer directly to the direct debit guarantee.