How to Reverse a Direct Debit Payment

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On occasion, organisations and businesses that collect payments can sometimes fall victim to human error when payments aren’t collected correctly. Fortunately, the Direct Debit Guarantee protects payers from this.

How? Well, the Direct Debit Guarantee covers against error and any failure to follow the Bacs rules. So, businesses must comply with these, whilst also knowing where they stand in relation to challenging payment reversals.

Let’s take a look at reversing a Direct Debit payment in more detail…

What are Payer Rights?

Organisations are required to provide their customers with advanced notice of any amends to their Direct Debit under the Direct Debit Guarantee. For example, this could be a change to the payment amount, frequency or date.

Usually, this would need to be done 10 working days prior to the payment being taken, but shorter periods can be agreed and would be noted in the Direct Debit Guarantee on the completed Direct Debit Instruction.

If an organisation fails to follow this process, they will be in breach of the Direct Debit rules. However, in some cases a Direct Debit payment might not be taken on the exact date and as such, a company has a three date grace period from the original collection date.

Service Users Process

As we’ve previously mentioned, service users who have collected a Direct Debit payment incorrectly must adhere to the strict set of Bacs rules.

The Bacs scheme rules are specific to whether the error is discovered before a collection file has been submitted or afterwards. On top of this, they also consider whether it will impact a single collection or the majority of a file.

Ultimately, service providers should do everything possible to avoid the need to reverse a Direct Debit payment.

Allow FastPay to Handle Your Direct Debit Collections

Businesses have a lot on their plates. Especially in the current economic climate.

With FastPay – you can eliminate hassle by letting us take care of your Direct Debit payments.

Ready to thrive and remove the stress? Start your conversation today and contact our team.

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