BECS Direct Debit Authorities and Instructions

In this section, we’ll explain the rules for setting up and managing BECS Direct Debit authorities and instructions. You can also read our guides on getting access to BECS Direct Debit and taking payments.

What is a Direct Debit Authority?

This is a paper-based authorisation form from your customer. It allows you to collect future payments for the standard service and preferred service. The form is also known as an an approved authority. In a Direct Debit authority, the following rules apply.

• You can collect future payments from your customer, which can be set or variable amounts

• The authority must include the authorisation code of the Initiator

• It must also collect all the information necessary to link the Authority to an acceptor’s account

• It must also state all conditions relevant to the operation of an authority according to BECS standards

Before being used to take payments, the sponsoring bank must approve the authority. Approval is shown by a code printed on the bottom left corner of the form. This code consists of the registration number allocated by the sponsoring bank, along with the month and year of approval.

BECS has a specific set of rules for the layout and content of Direct Debit authority forms. The first page of the form should include: * Name and details of the account to be debited * Date * Authorisation code and initiator name * Signature of the acceptor (customer) * Approval code from sponsoring bank * Specification of the information to appear on the acceptor’s bank statement

What is a Direct Debit Instruction?

This applies only to the paperless service option. Here, a paperless initiator will ask for a Direct Debit instruction from the customer, in order to debit the customer’s account. The paperless initiator must also offer the option of signing an approved authority on paper, if the customer asks for this.

Before getting started, you’ll need to have your bank review and approve the format, content, medium and procedures for obtaining instructions.

How do I set up a Direct Debit authority or instruction?

Your customer must complete a request form, which can be in one of the following ways.

1. On paper. The customer fills in and signs a paper Direct Debit authority form, then returns it to you.

2. Online or by phone. You can collect the required Direct Debit instruction from your customer using a bank-approved phone script or online form. Then, you send your customer a written confirmation, which includes details of the Direct Debit instruction.

Terms and Conditions of the authority

Your authority form needs to include the conditions of the authority (which require bank approval before use). The conditions usually include the following.

• Advance notice. The scheme usually requires customers to be given 10 days notice before a payment is taken. This period can be shortened with bank approval.

• Cancelling the authority. This outlines how the customer can cancel the authority

• Stopping a payment. Specifies how the customer can stop Direct Debit payments

• Details of the bank’s responsibilities in relation to the Direct Debit authority

You can also use ‘Alternative Conditions of Authority’, specifically related to variations in advance notice periods, or cancelling an authority online. These are also standardised and will require approval from your bank.

For the standard service, completed paper authority forms must be sent to your sponsoring bank. This is necessary for the bank to link the authorisation to the acceptor's bank account, which allows you to request payments in the future. For the preferred service, you should retain the completed paper authority form as evidence that your customer has authorised a Direct Debit payment.

Paperless Direct Debit Instructions

To use Direct Debit instructions online or by phone, you’ll need your bank to approve the content and format of the instruction. Here’s the full breakdown of what a successful Direct Debit instruction should contain.

A paperless Direct Debit instruction should do the following.

• Identify the acceptor's bank, with account number and bank code

• Identify itself as being an instruction to accept Direct Debit payments

• Identify the acceptor's bank to be debited, along with the acceptor's physical address (to receive confirmation)

• Authorise and request the paperless initiator to initiate Direct Debit payments

• Request the acceptor's bank to accept Direct Debits from that paperless initiator against the acceptor's named account through the paperless service.

• If there is a person acting on behalf of the acceptor, the instruction must confirm their full name and that they are authorised to operate the acceptor's account.

• The instruction must be made in writing or by phone (but not SMS)

• It must notify the acceptor of the terms and conditions

• It must also:

  • Provide relevant notice

  • Specify how the acceptor may terminate the instruction for future Direct Debit payments

  • Specify how the acceptor’s bank may reverse any disputed Direct Debits

• Advise the acceptor where to find the standard conditions of the paperless Service

• Inform the acceptor that confirmation of the instruction will be sent out by physical mail within five business days

Once you’ve received an instruction from your customer, you’ll need to retain it for your records. Later on, once you’ve submitted your first Direct Debit payment request, your bank will link your authorisation code to the the acceptor's (customer’s) account to enable future payments.

Written Confirmation

When using the paperless Service, you’ll still need to send your customer written confirmation of the instruction, along with the terms and conditions. The standard conditions are the same as for a paper authority, except you must use the word ‘instruction’ in place of the word ‘authority’ throughout.

Also, it’s worth noting that you can’t collect an instruction to debit an account from someone who doesn’t own the account, or in cases where more than one person is required to authorise debits from the account (for example, a joint account).

Managing Direct Debit authorities and instructions

For paper authorities, you must give the acceptor either a copy of the authority itself, or written details of its terms and conditions.

For paperless instructions, you’ll need to send physical confirmation of the instruction to the acceptor within five business days of receiving the instruction. The confirmation must do the following:

• Identify the paperless initiator (by name and authorisation Code)

• Specify the date you received the instruction from the acceptor

The confirmation must include:

• A copy of the original instruction

• Standard terms and conditions of the instruction

• Contact details for the paperless initiator. This must include a phone number in case the acceptor wants to change or cancel the instruction

For the preferred and paperless services (where an authority or instruction is retained by the initiator), the initiator must keep the authority or the instructions and confirmation in written form for seven years after the last Direct Debit transaction was processed.