Incorrect payments and refunds

A Direct Debit is known to be one of the safest and easiest ways to pay for your products and services, but as with anything errors can occur. Whether you’re a customer who has entered bank details incorrectly or a business that has taken a payment a day early, we have got you covered on what to do.

 

Check the Direct Debit set up details

When a Direct Debit is set up all parties should be aware of the amount due to be taken and the date in which this will be deducted from an account. A document known as an ‘advanced notice’ will be issued to the bank account owner. If the amount taken or the transaction date differs from what is stipulated on the advanced notice, an immediate refund may be available as part of the Direct Debit Guarantee.

An important thing for both customers and businesses to check is whether the payment date has been changed to allow for an upcoming bank holiday or weekend. If a payment is set to fall on a National Holiday e.g. Christmas Day it is common practice that the payment date will be changed to a day further in advance e.g. December 28.

On occasion, a payment may be deducted earlier than expected. Where this is the case, notification should be given to the account holder.

 

What to do when you are certain an error has been made

Once you are certain an error has been made, the bank in which the account is held should be contacted immediately, either face to face or via email, letter or telephone communication.

It is helpful to know that if an unauthorised payment has caused you to become overdrawn you can also claim back these additional charges.

Payment errors should be refunded immediately. Where this is not done a complaint can be raised with the bank in question directly or through the Financial Ombudsman.

 

Delays in refunds are possible

In many instances, a refund is not immediately paid because the bank and the organisation that mistook the payment will need to liaise with one another.  Your bank should give you a rough timescale on how long they think this will take. It is also important to remember that the bank is the party that is responsible for chasing the refund, meaning the process is relatively stress-free for customers.

If you are a business and you have been made aware by a customer that an error has been made, whilst it can be frustrating to hear, you must make the customer aware that for data protection and security purposes only the account holder can report the error.

 

Further guidance

Whilst we hope the above has clarified the course of action one should take if a payment error has occurred, however further help and support can be found for DFC customers/ clients by calling the dedicated helpline 01908 422 000 or by completing an enquiry form.

Is it time to consider direct debit?

A set amount coming out of your bank account every month in the form of a direct debit can sometimes seem like a daunting prospect. However, here at DFC, we know this is one of the safest and easiest ways to pay for your products and services, with the benefits far outweighing the negatives.

If you have a direct debit mandate in front of you or are tempted to pay this way to secure yourself the best deal, then have a read of this blog post to find out why direct debit is for you!

 

There’s a safety net in place for if things go wrong

Let’s imagine you write a cheque to your local gym, ensuring your salsa classes are booked and paid for for the next six months. You quickly check your online banking and notice the amount has been deducted not once but twice. Now hours of phone calls to your bank and the gym are about to take place, with the dance class a distant memory.

Set Direct Debit payments to prevent this, with a Guarantee in place ensuring that customers will get a full and immediate refund if a payment error has been made.

 

Your money is immediately available, meaning a better service for YOU

A fixed amount going into a business’s account every month gives companies the opportunity to put that money back into the business, rather than having to wait until more revenue comes in to fix the rowing machine!

It’s easy to assume that businesses want you to pay by Direct Debit to boost their balance. Whilst all companies have bills to pay, your direct debit payments mean funds are available to improve the products and services you are paying for.

 

No late payments

Is there anything worse than having to pay a company, for not paying a company? Two payments deducted for one service.

With a Direct Debit in place, you can rest assured knowing how much is coming out and when.

 

It’s easier to manage your money

We would all like our savings accounts to be fuller and for money to be more readily available when needed. However, many of us just don’t have large amounts of cash to spare meaning that a little and often direct debit payment is the perfect way to avoid missing out.

 

You can get access to the service you want more quickly

Alternative payment methods (to direct debit) often involve remembering to send a cheque or engaging in a telephone conversation. With direct debit, if you decide you want something you can visit the website and sign up there and then!

Our valuable call centre does more to help your customers

  • 13 Oct 2017
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The internet is great for answering all manner of intricate questions and emails are fantastic for squaring off quick queries. Sometimes though, you just need to speak to a human. That’s where call centres come in.

This is particularly pertinent in complicated areas such as finance. Providing a quick, direct line of communication that allows people to settle matters from the comfort of their own home is a cornerstone of customer service.

DFC set up their call centre to deflect the onus off busy organisations without the necessary knowledge or time to deal with Direct Debit queries. It’s proved an ongoing success, with almost 50% of all enquiries now handled over the phone!

 

A high grade of service

DFC’s trained call centre experts are busy taking up to 20,000 calls a month from their client’s customers. Enquiries cover everything from the setup of Direct Debits to cancelling and changing payment dates.

It’s their goal not to get caught up in the negative associations that befall most call centres, especially in areas like wait times. DFC’s call handlers’ answer 95% of all calls that come their way and 75% of these are picked up within the first 45 seconds.

With the reputation of their clients reflected in the service provided by DFC’s handlers, it’s imperative that all calls are handled in a professional and effective manner.

More recently, they opened their doors on a Saturday to provide support to hard-working individuals who simply don’t have the time to get in touch during the week. This way, customers can manage their payments more efficiently and busy organisations can get back to what they do well – growing their business.

 

Training and security

One of the top priorities at DFC’s call centre is security. When handling sensitive data frequently, it’s imperative not to let it fall into wayward hands.

All customers are taken through a series of security questions before their enquiry is dealt with and staff are trained to a level in which they are competent to comfortably handle all safety measures that are in place.

Beyond this, employees undergo a thorough training induction that teaches them the ins and outs of the business alongside the nature of calls handled on a day to day basis. No stone is left unturned. As a result call handlers can manage each call efficiently and as quickly as possible.

 

Our call centres are open from 9am – 5pm Monday to Friday and 9am – 4 pm. If readily available help for your customers regarding their Direct Debits sounds like something you could benefit from, then get in touch now on 01908 422 000 or drop us a message.

Direct Debit for charities and fundraising organisations

  • 13 Oct 2017
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A large bulk of income for charitable organisations comes from people making regular donations. For that reason, it makes every bit of sense to use a sustainable collection method that enables a consistent transfer of money with little input from the donor. Direct Debit is the simplest solution.

Luckily, it seems the majority of charitable organisations have taken advantage of this arrangement. According to London and Zurich, Direct Debit now accounts for 31% of all UK voluntary charity donations. In the last year, 58 million donations, worth £1.1bn, were made to UK charities.

The benefits of Direct Debit

Fundraising 

Looking to save money where you can is important to any business, but it’s particularly crucial to charities. On average, a charity spends £0.12 on fundraising for every £1 they receive as a donation. Getting as many donors on board with Direct Debit as you can won’t only ensure a continuous stream of income; it will give you one less person to try and win over.

 

A cheaper alternative  

Direct Debit is cheaper than the majority of collection methods, like credit and debit card. This is a great opportunity to throw incentives, discounts and prize draws into the mix to encourage people to sign up. For example, if you’re a charity-based leisure facility, take this opportunity to push out some membership offers.

 

 Save time on admin

Using Direct Debits means you’ll always know in advance exactly when funds will be cleared and in your bank account. This greatly reduces the room for oversights and cash flow issues within the business. Beyond this, Direct Debits are automated. Never again will you have to worry about where money is coming and going, making it easier to plan to for the future.

 

Spreading costs

How many of us choose to pay that little bit extra and spread our outgoings rather than pay a large sum upfront?  It’s the same story for your charity donors. £2 a week sounds much more appealing than £104 upfront. Once they’re signed up, that’s that. The money comes out of their account automatically.

 

Easy sign-up

Online joining provides another relief to pricey fundraising costs. Quick, convenient and easy, online joining portals like our FastDD give people the option to sign up on a range of platforms wherever they see fit. As long as there’s an internet connection, they can do it from the comfort of their couch or on their commute. This can even also be pushed out on various forms of marketing collateral. Best of all, it’s great for the environment!

 

Go one step further and get in touch with DFC. Our experts can manage your Direct Debits for you, improving collection rates, ensuring knowledgeable customer service for your donors and enhancing your bottom line.

A who’s who of Direct Debit

Much like with any banking or payment process, the Direct Debit cycle involves a number of key players who work tirelessly behind the scenes to ensure Direct Debit mandates move forward without a hitch.

Thanks to these guys, the public can submit a Direct Debit quickly and easily from the comfort of their couch without any hassle. Businesses can also take a break from lengthy administration duties and maintain a better grasp on their finances. Who exactly are we talking about?

The organisation that the customer is paying to

If a customer is happy to utilise the services of an organisation, they might set up a Direct Debit with them. This can either be for ongoing or one-off payments and can be set up over the phone, the internet or via a Direct Debit Instruction form. This information will then be passed on from the organisation to the bank, giving the bank permission to collect money from the customer account.

 

The bank/building society

Banks and building societies operate as the middleman between the organisation and customer. They are responsible for responding to all requests, be it sending money to and from accounts, handling default payments and refunding money taken in error. The Direct Debit process operates over a three-day window from the submission of a payment until the final account entry stage.

 

Bacs Payment Schemes Limited

Bacs is the organisation responsible for the efficient operation of the Direct Debit scheme. They write the rulebook on what is and isn’t acceptable and ensure that the scheme upholds the highest industry standards. They don’t have a direct relationship with customers. Instead, they remain in the background overseeing the process and ensuring it remains airtight for consumers and businesses alike.

 

Financial Ombudsmen

This is the independent service set up by Parliament for settling financial disputes and maladministration between consumers and businesses. They will make circumstantial decisions in each case based on what is fair and reasonable.  They must take into account relevant laws, codes of practice and industry guidelines and standards.

 

Direct Debit bureau

Direct Debit bureaus, like DFC, are the experts in managing all aspects of the Direct Debit scheme from setup through to collection. This takes the onus of busy organisations which don’t have the time or knowledge to manage their collections themselves. Direct Debit bureaus improve cash flow and collection rates and can even offer advice and guidance on the best ways to get new and existing customers on board.

 

Get in touch with DFC today. Our mission is to help you improve your relationships with your customers so that they stay longer. You can leave us to collect your Direct Debits, while you concentrate on running – and growing – your business

Common Direct Debit error messages

Direct Debits are renowned for being easy to manage. Only in around 1% of cases does a payment fail. Nonetheless, it’s still important to keep track of failures and changes to Direct Debit Instructions.

Bacs will send Direct Debit handlers reports detailing the status of payments post collection, as well as making daily reports available from 6am onwards. A series of codes will give you the information you need as to why a payment has failed or changed. These fall into the following categories:

 

Direct Debit Instructions notifications

  • Automated Direct Debit Instruction Service (AUDDIS) – AUDDIS notifications relate to issues surrounding the setup process as well as cancellations initiated by the seller.
  • Automatic Direct Debit Amendment and Cancellation Service (ADDACS) – these messages provide information on Direct Debit changes or cancellations initiated by the customer.

Payment request notifications

  • Automatic Return of Unpaid Direct Debits (ARUDD) – you will receive an ARUDD message when a payment fails.
  • Direct Debit Indemnity Claims Advice (DDICA) – 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.

 

Direct Debit Instructions notifications

AUDDIS notifications

Errors in bank account details provided by customer

Code                                 Bacs explanation
2 Payer deceased
3 Account transferred
5 No account
B Account closed
C Account transferred
L Incorrect payer’s account details

 

Further errors in submission or Direct Debit Instruction

7 Direct Debit Instruction amount not zero
I Payer reference is not unique
M Transaction code/user status incompatible
O Invalid reference
P Payer’s name not present
Q Service user’s name blank

 

Unable to setup Direct Debit Instructions on account

F Invalid account type
G Bank will not accept Direct Debits on account
N Transaction disallowed at payer’s branch

 

Errors cancelling a Direct Debit Instruction

1 Instruction cancelled by payer
6 No instruction
H Instruction has expired
K Instruction cancelled by paying bank

 

ADDACS notifications

Direct Debit Instruction cancelled

0 Instruction cancelled – refer to payer
1 Instruction cancelled by payer
2 Payer deceased
B Account closed
D Advance notice disputed

 

Direct Debit Instruction altered

3 Account transferred to a new bank or building society (collection suspended)
C Account transferred to a new bank or building society (DDI transferred without any issues)
E Instruction amended
R Instruction re-instated

 

Payment request notifications

ARUDD notifications

Insufficient funds                  

0 Refer to payer

 

Mandate failure

1 Instruction cancelled
2 Payer deceased
3 Account transferred
5 No account (or wrong account type)
6 No instruction
B Account closed

 

Payment request submission mistakes

8 Amount not yet due
9 Presentation overdue
A Service user differs

 

Customer disputes payment

4 Advance Notice disputed
7 Amount differs

 

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.

Why do businesses choose Direct Debit?

More and more people are using Direct Debit to make their regular payments to a company. The Direct Debit payment process is time and money saving for customers, but it’s equally convenient for businesses, not least because their customer’s love it.

Whether you’re talking your bottom line, customer service or streamlining your processes, Direct Debit is a worthwhile strategy to consider. We’ll name just a few of the main benefits below.

 

Declutter your administration process

Running a company can be exhausting, particularly when you don’t have a handle on incoming payments. Your struggles will end with Direct Debit as this payment method supports your company’s cash flow and encourages payment flexibility. It’s easy to track incoming and outgoing payments because you’re in control.

 

Reward your customers

Direct Debit is the cheapest payment method available in the UK. Many organisations, particularly leisure facilities and retail, channel this into member discounts.  Special offers and incentives for people signing up by Direct Debit will make your business even more attractive to prospects and fend off local competition.

 

Easy marketing

Discounts and incentives aren’t the only way to prick the ears of potential customers. Online joining portals, like DFC’s FastDD, are available 24/7 and easily accessible, whether it’s during morning commutes or sitting back on one’s smartphone. This can be promoted across numerous channels, be it digital or printed collateral, encouraging people to sign up at their convenience.

 

Doing your bit for the planet         

Corporate social responsibility is a buzzword that doesn’t look set to lose popularity anytime soon. Thankfully, paperless Direct Debits allow you to get customers started without you having to think about paper, printing, and storage. This is beneficial to you as it is to your customers and it’s great news for the environment!

 

 

DFC provides revenue management solutions tailored to the needs of your company and clients. You can leave us to collect your Direct Debit’s whilst you concentrate on running – and growing – your business.

We do more customer service

Customer service may not be the backbone of the economy, but it’s certainly the brain. We all set our expectations high in this department and take offence when it’s not met. After all, would you continue giving your hard earned money to an organisation that didn’t treat you with respect? That’s why, at DFC, we do more to go the extra mile for our clients and their customers.

A more tailored approach

It’s our job to provide a seamless operation that works in synergy with yours to maximise income, streamline administration and give you a competitive advantage.

Every organisation is different. That’s why we offer a bespoke service tailored to your services and clients. Our fully managed service (FMS) handles all the hard work of collecting Direct Debits for you so that you can focus on your core business.

Our FMS takes the onus of organisations in areas such as collection and credit control. We also go out of our way to integrate with your CRM system. If it’s a system we haven’t previously encountered, we’re more than happy to go the extra mile to include it.

“DFC is meticulous to detail and customer service is second to none, not to mention the expertise and advice they offer our management team at all levels.” – Mike Lyons, BH Live

You will always find us working hard to provide the next big solution or innovation to make the lives of our clients easier.

Working for your customers

Around providing you with excellent customer service, we’re also doing the same for your customers. It’s important that we make the payment process as simple as possible for them. As such, we’ve opened up more payment avenues than ever before to ensure that there’s always someone on hand to handle your customers’ queries.

We’ve recently expanded our call centres hours to include Saturdays for those that simply don’t have time to get in touch during the working week. Our Direct Debit experts are busy listening to thousands of requests a day so that your busy staff don’t have to. DFC’s friendly team are as knowledgeable as they are helpful.

Our online joining portal is also easily accessible across a range of devices. This allows your customers to sign up to direct debits quickly and at their convenience. It can be easily integrated into your site and app, acting as a 24-hour sales aid.
If you’re interested in our services, get in touch now on 01908 422026 or drop us a message on our contact form.

Recurring card payments vs Direct Debit – the winner is…

  • 01 Aug 2017
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Direct Debit and recurring card payments are amongst the most common methods of making regular payments. Whilst the concept of both is similar, there are slight variables between the two which cause confusion time and time again.

So what’s the difference?

  • Direct Debit – by signing up to Direct Debit, you give an organisation the authority to take money directly from your bank account. Payment times and quantities can be fixed or flexible, but advance notice must be given to you prior to any changes in the amount debited. You have the right to cancel at any time.
  • Recurring card payment (also called a continuous payment authority (CPA)) – recurring card payments operate in a similar fashion, except you give a company or organisation the permission to take money from your debit or credit card. Amounts can be variable and you have the right to cancel at any time.

Choosing between the two comes down to whether you would rather go through a bank (Direct Debit) or a company (CPA). Ultimately, however, you’re guaranteed a much stronger safety net with the bank. This way, you have a middleman orchestrating the process. In fact, the Direct Debit process offers greater protection overall.

 

Make the right decision

A recurring card payment gives companies the authority to charge whatever they want, whenever they want.

This is also true of Direct Debit of course, but stronger safeguards hinder wayward activity. The Direct Debit Guarantee acts as a failsafe so that if an error occurs, you’ll receive a full and immediate refund of your money from your bank rather than the company itself.

Moreover, expect a bigger slog on cancellation, particularly if you’re also thinking about cancelling your credit card. A bank won’t cancel your card instantly. It will likely take a few months to ensure all payments have been processed. Recurring card payments can still take place in this time, forcing your account to stay open for longer.

Finally, it’s worth considering the failure rates and costs of a CPA. Recurring card payments characteristically go hand-in-hand with a monthly fee for a merchant account, as well as a 3% margin and 20p cost per payment. You can also expect a 5% failure rate. On the other hand, Direct Debit charges less than 1% per transaction with a failure rate less than 1%.

If you feel your company could benefit from streamlining its payment process, give us a call on 01908 422 000.

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Direct Debit processing timescales

Last year, a record 6.22 billion Direct Debit transactions were made in the UK. This is due in part to its sheer ease of use and airtight processing system, making billing and administration a doddle. You see, Direct Debit isn’t considered amongst the safest payment methods for nothing.

Behind-the-scenes, Direct Debits are processed in three stages. This comes into play for existing mandates, new mandates, accepted payments and rejected payments. Let’s explain further.

 

Bacs three-day cycle

Designed in the 1970’s, Bacs three-day cycle offers a Direct Debit processing timescale starting from the submission of a payment until the final account entry stage. It works like so:

 

Day 1 – input: Payment requests must be submitted to Bacs between 7:00am and 10:30pm. This info is dispatched to recipient banks overnight

Day 2 – processing: Data is then processed and the bank prepares to respond as necessary.

Day 3 – entry: Payments are debited from the payer’s bank account and credited into the merchant’s account.

It all sounds very simple and in an ideal world, it would be. But as we all know, payments sometimes bounce. In this case, the process will follow through as normal and the payment will still be credited to the merchant’s account.

It then falls on their bank to set the payment reversal in motion. This reversal operates in a similar fashion to the above and, in most cases, takes three working days to clear:

 

Day 3: Soon after the payment has been credited, a payment failure is submitted. In very small instances, this won’t take place until the following day and will push the process to four-working days.

Day 4: The merchant receives notification and further details on the payment failure through a payment failure report.

Day 5: Payment is debited from the customer’s account and credited back into the merchant’s account.

If a failure report isn’t received by the merchant in this time, then the transaction can be considered a successful one. Remember, submissions won’t be counted on working days. For more information on the Direct Debit process, get in touch with DFC on 01908 422026.

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