Direct Debit Training and Consultancy, Guarantee, News stories, Scheme Rules
Bacs, Consultancy, Direct Debit, Guarantee, News, Paperless Direct Debit (PDD), Reports, Training, Uncategorized
06, FEB 2015


Over the Christmas holidays, I purchased a gift of a magazine subscription for a family member. It was gratefully received and we were both happy. Afterwards, however, when I received a confirmation letter with details of my Direct Debit payment schedule, I noticed several errors in the Direct Debit process – one of which was that the organisation was using the wrong Direct Debit Guarantee in their correspondence! It made me wonder how many other organisations might be unaware they are not complying with the Direct Debit Guarantee Scheme rules.


What is the Direct Debit Guarantee?

The organisation was right to provide me with a copy of the Direct Debit Guarantee. The Bacs rules on the Direct Debit Guarantee scheme are very clear that a Payer using a paperless sign-up method – such as online or by telephone – must receive written notification of the Direct Debit Guarantee as part of the confirmation and/or Advance Notice letter – as they won’t have otherwise received it as part of the Direct Debit Instruction process.

This is a copy of the Direct Debit Guarantee that I was posted as part of the confirmation letter:


Incorrect DD Guarantee

Unfortunately, this version is out of date. It was actually withdrawn in 2011 when the Direct Debit Guarantee scheme was revised, and the various different versions of the text were replaced with one single approved version of the Direct Debit Guarantee – see below for an example of this.


Correct DD Guarantee

As you can see, the Direct Debit guarantee scheme approved version ends with the sentence: “Please also notify us.” If the version you are using ends with any other phrase – such as in the one I received, above – then it is not correct. This is because it is not permitted for Service Users to vary the wording in any way, only to insert into the Guarantee the relevant details that relate specifically to their organisation.

Another issue I noticed here was the size of the Direct Debit logo. In the example, I was sent it is smaller than the requirement laid out in the Direct Debit Scheme rules. Also, it is important that the organisation name that appears in the Direct Debit Guarantee is the registered name of the Service User – which is not necessarily the trading name or the name which will appear on the bank statement of the Payer.

You may be wondering if it is really that important to use the correct version of the Direct Debit Guarantee? Well … yes, it is! The Guarantee and the unique reassurance it offers Payers versus other payment methods (for example credit card payments, which offer no such guarantee) is one of the key reasons that the Direct Debit Scheme has been successful. If an organisation uses an incorrect Guarantee it reflects badly on both them and the Direct Debit Scheme as a whole.

In summary, it is vital to make sure your organisation is up to date with the Direct Debit Guarantee Scheme rules, and that your staff fully understand what the Direct Debit Guarantee is and how it works. We offer Bacs Accredited Training and/or Consultancy services to enable you to review your knowledge and processes and ensure you are achieving compliance with the Scheme rules. If you have any questions about the Direct Debit Guarantee Scheme, please don’t hesitate to get in touch.