What is a Direct Debit Instruction?

A Direct Debit Instruction, also known as a mandate, is a green light from your customer to collect future payments out of their account. Each Direct Debit Instruction will be privy to the following terms:

  1. All future payments are authorised. A service provider can collect money from their customer’s account at any time without the need for confirmation.
  2. Customers must be notified of every payment leaving their account via a Direct Debit related to that good or service.
  3. Organisations must adhere to the Direct Debit Guarantee, a set of regulations protecting customers from any wrongdoing.

 

Direct Debit Guarantee

Devised by Bacs, the regulatory body responsible for overseeing UK automated payment methods, the Direct Debit Guarantee acts as a safeguard for customers.

Anyone with a Direct Debit Instruction is automatically protected under regulations laid out in the scheme. Under the Direct Debit Guarantee, customers can cancel their instruction at any time and receive an immediate refund in the event of an error (amongst many other protections).

 

Setup

A Direct Debit Instruction can be set up online, over the phone or old-school style – via a paper mandate form.

Secure online joining and telephone setups are the most popular methods of setup, as they are much quicker and more convenient. Online joining portals, in particular, can be accessed with little hassle and the process is generally painless.

To set up a Direct Debit instruction, a customer will simply need their name, bank name, sort code and account number. The service provider will then need to submit this to the banks.