Paper Based Direct Debit
Ever since the introduction of AUDDIS (Automated Direct Debit Instruction Service) in 2005, all communications between Direct Debit Originators and BACS are carried out electronically via a secure online network.
Despite this, the majority of businesses and organisations continue to receive signed Direct Debit instructions from their customers on a paper mandate. However, the paper instructions are retained at your premises instead of being sent to the banks and building societies. Once customer instructions have been recorded on your organisation’s computer records, the data can be sent to the paying banks via FastPay to enable them to record the authority in their own customer Direct Debit records.
You will then send Direct Debit payment requests electronically via FastPay to BACS who in turn will send those instructions onto the paying banks. Payments are collected automatically by BACS and if, for any reason, the payer is unable to honour that payment, the payer’s bank will request a refund from BACS who will forward the request to FastPay. The refund is expected within 3 days. Should one of your customers query a payment or instruction with their bankers, their bank may request a copy of the paper instruction held by you. You will have to provide a copy of the instruction to the bank within seven working days. If you store Direct Debit Instructions digitally, the bank will normally accept a copy of the original instruction bearing the customer’s signature.
Being in possession of a signed instruction puts you, the Originator, in a very secure position in the event of any dispute. This is the reason why, even in today’s world of electronic communication, the banks favour the security of the paper based method over Paperless Direct Debit.
To view more sample mandates, please visit ‘Other Downloads’.