The implications of GDPR on the Direct Debit industry

GDPR. It was nowhere and then suddenly it was everywhere. The buzzword at the front of business professional’s tongues for the past year. As such, industries have been forced to become stricter on how they store and use personal data. But what impact will this have on companies collecting Direct Debits and bureaus hired to manage this cash flow?


What is GDPR?

The introduction of GDPR, or the General Data Protection Regulation, is the largest change to data protection in the last 20 years. GDPR will replace the current Data Protection Act (DPA) in May. Whilst the rules under the new legislation don’t stray too far from those under the DPA, the tightening of these will have effect a visible change to organisations, and the onus is on the controllers and processors of data to enforce these.

  • Controller: The ICO describes a controller as the person, or organisation, responsible for determining ‘the purposes and means of processing personal data.’ This might be a leisure organisation handling Direct Debit membership collections, or a magazine collecting subscriptions via Direct Debit
  • Processor: This is the body responsible for processing personal data on behalf of an organisation. We, at DFC, fall under this remit, alongside other Direct Debit bureaus who manage Direct Debit cashflow for third-parties.


What needs to be considered?

The GDPR’s definition of ‘personal data’ is much broader than under the DPA. It is any information relating to an identifiable person, be this a name, an ID number as well as social, genetic, and importantly in the case of Direct Debit, economic identifiers.

It has never not been important to pass data safely and securely. That said, those in breach of non-compliance can face fines of up to €20 million or 4% of annual turnover (whichever is highest). It’s in every organisation’s interest to take data protection more seriously, if only for their own sake.

Finally, people will no longer have to jump through hoops to access their own stored data. They can request corrections to inaccurate data and have the ‘right to be forgotten’ – i.e. controllers and processors must remove all information held on them.


Direct Debit is the securest money transfer service available, but that shouldn’t stop you taking steps to ensure you meet the expected regulatory standards for yourself and your customers.

If you have any questions regarding how the new laws may affect your Direct Debit provisions, why not get in touch? We may be able to answer any questions you have. Alternatively, for more information on DFC, or to find out what we can do to help improve your cash flow, visit us at

Making sense of Direct Debit acronyms – a guide to BACS, AUDDIS ADDACS and more

Ever looked at Direct Debit documentation and been confused by all the financial jargon in it? You’re not alone. Below, we break down some of this puzzling terminology in more detail:



Before rebranding to Bacs Payments Ltd, Bacs stood for ‘Bankers Automated Clearing Service.’ Despite the name change, the organisation’s purpose has remained the same. They are the body responsible for the clearing and settlement of Direct Debit and Direct Credit. Bacs oversee all Direct Debit transactions and each instruction will follow through a payment system devised by Bacs.


ADDACS – Automated Direct Debit Amendments and Cancellation Service

This is an automated service enabling banks or building societies to notify collecting organisations of any amendments of cancellations to a customer’s Direct Debit. The service user will receive a report, generated either automatically or manually, outlining any changes to a Direct Debit instruction.


AUDDIS – Automated Direct Debit Instruction Service

AUDDIS automates the transfer of money between the service user and their bank or building society. It is the service enabling Direct Debit instructions to be lodged electronically, rather than on paper. Not only is the Direct Debit process dramatically sped up through AUDDIS, the number of errors caused by manual handling is also reduced.


ARUDD – Automated Return of Unpaid Direct Debits

An ARUDD message will be sent from the bank or building society to the service user in the event of a failed payment. Like an ADDACS message, the collecting organisation will manually or automatically receive a report with a reason code detailing why the failure happened.


DDICA – Direct Debit Indemnity Claims Advice

DDICA notifications take place when a customer raises an indemnity claim against you. This will be for one of three reasons: the customer denies all knowledge of setting up a mandate, a payment has been collected after a mandate has been cancelled, there are problems with a specific payment collection.


Get in touch with Debit Finance for any further questions you may have surrounding the Direct Debit process. Alternatively, leave them to collect your Direct Debits whilst you concentrate on running – and growing – your business.


Inactive Direct Debits

It’s important to keep a check on your Direct Debits for several reasons, but the dormancy rule is arguably one of the most significant of these. This is the rule that stipulates that a Direct Debit instruction will be removed from a banker’s system after 13 months (typically) of inactivity.


What is the dormancy rule?

The dormancy rule was put in place by Bacs, the body responsible for regulating Direct Debit.  It acts as a safeguard in the instance that Direct Debits should be left on a customer’s account indefinitely. This way, companies can’t reach their hand back into a consumer’s account at a later point without the permission of the account holder.


What to do in the event of an inactive Direct Debit

The first step in this process is ensuring you stay conscious of your Direct Debit activity so you can mitigate any issues that should arise. In order to continue further Direct Debit payments to a service provider, a new Direct Debit instruction must be issued.

This will require re-joining, or re-subscribing to the service you were previously using. Failure to do so will result in the Direct Debit payment being returned to the bank account.


If your business needs revenue management services, contact DFC here. We do more than simply manage your cashflow.