Commonly used Direct Debit Terms

Because it’s important to understand the Direct Debit process, we’ve compiled some more commonly used terms and clear explanations of what they mean.

“Paperless Direct Debit”

A term you’ll see and hear more and more frequently is ‘paperless Direct Debit’, and this simply means a Direct Debit Instruction that’s arranged via a phone call of online, so there’s no paperwork or form filling involved.

“Due Date”

Next it’s ‘due date’. This term is used to refer to the date a collection is due to be made, so it means the date your funds will leave your account according to your Debit agreement. The next term is ‘counter-claim’, and this is a claim created by a service user in response to a customer’s indemnity claim.

“Direct Debit Indemnity Claim Advice” (DDICA)

Customers have the right to place an indemnity claim for a refund under the Direct Debit Guarantee, and if the service user disputes their claim then they’ll put in a counter claim. A counter claim must be placed within 14 days of the indemnity claim going through.

When an indemnity claim is raised by an individual, the service user will receive what’s known as a DDICA, or a ‘Direct Debit Indemnity Claim Advice’. This is a notification that one of their customers has put in a claim.

“Direct Debit Guarantee”

Finally, there’s the ‘Direct Debit Guarantee’. This guarantee applies to any Direct Debit collection, and it protects customers who make their payments via the scheme. One of the main ways in which the guarantee is beneficial is that in the event that a payment is ever taken in error, the customer has the right to expect the funds returned immediately by their bank or building society, and it’s their responsibility to pursue reimbursement. The Direct Debit Guarantee offers peace of mind to anyone who relies on the Debit scheme.