An Advance Notice is a communication sent to the Payer detailing the date of debiting and the amount to be debited.
Advance Notice letters must be scheme-compliant, and the letter formats used must have been approved by the sponsoring bank.
When do Direct Debit Advance Notices need to be sent?
An Advance Notice must be sent on three occasions:
- A customer initially signs up to pay by Direct Debit
- Changes are made to the amount
- Changes are made to the due date, not including those impacted by Bank Holidays
Collection must occur on or within three working days after the agreed date. If, for any reason, a collection run is unable to take place at the allocated time, perhaps due to system failure or staffing issues, Bacs allows three working days as a reasonable time period within which the collection can then be taken.
If the collection cannot be made within this timescale, then a new Advance Notice must be issued.
How far in advance do Direct Debit Advance Notices need to be sent?
Regardless of the format or channel that it is being sent via, the standard notice period is 10 working days. It is possible to agree on different notice periods with your sponsoring bank if appropriate.
Why do Direct Debit Advance Notices need to be sent?
The Advance Notice is necessary to remain compliant with the Direct Debit scheme. However, they are also helpful for both Payers and businesses.
- It allows Payers to budget for the collection, meaning it is less likely to fail because of lack of funds
- It reduces cancelled Direct Debits from customers thinking it is incorrect
- It reduces costly Indemnity Claims from customers not expecting a collection
What format do Direct Debit Advance Notices need to be sent in?
An Advance Notice can be provided in a number of different ways, including a letter, invoice or statement, payment schedule or contract. The Advance Notice can be provided in hard copy or any electronic format, provided all of the mandatory inclusions are present.
