Advance notice is one of the main protections offered by the Direct Debit guarantee. It requires you to give your customer notice of a Direct Debit payment before it’s taken from their account.
It’s important to get advance notice right. If you don’t, your customer will be entitled to an immediate refund. You’ll also find yourself subject to sanctions for breaching the Direct Debit scheme rules.
To help you keep on top of advance notice we’ve put together a list of six quick questions to ask yourself.
6 questions to help you get advance notice right
1. Are you giving your customers the correct notice?
As a default, advance notice is 10 working days before a payment is taken. However, you can agree a shorter notice period with your bank.
Do you know what your advance notice is? (HINT: you should be able to find it in your Direct Debit Guarantee).
2. Are you giving advance notice to the right person?
Advance notice must be given to the payer – the person who owns the account you’re planning to take the payment from. This isn’t necessarily always the “customer” e.g. parents paying for a student’s rent or a caregiver paying for an elderly relative’s care.
Make sure you know who the payer is. (HINT: It will be the person who authorised the Direct Debit instruction).
3. Are you including the right information in your advance notice?
Advance notice must be clear and provide the following details:
Amount of the Direct Debit payment
Due date (include date, month and year)
Frequency of Direct Debit collection (unless schedule of specific dates issued)
Direct Debit reference
Advance notice period (mandatory for initial notice but optional subsequently)
Service user name and contact telephone number.
4. Are you providing advance notice in the right format?
Advance notice can be given in writing, electronically or orally. Notices given in writing or electronically must be approved by your sponsor bank.
Warning - We wouldn’t recommend giving oral notice unless you really need to as it will increase your risk of an indemnity claim.
5. Are you always able to collect payments when you said you would?
Sometimes you might be unable to collect a payment on the date you gave in the advance notice – maybe the person who submits your payments is ill or your computer systems or software fail. Don’t panic – it’s absolutely fine - as long as you collect the Direct Debit payment on or within 3 working days after the specified date. Remember this is 3 working days – so weekends and bank holidays don’t count.
If you can’t collect the Direct Debit on the agreed date, you’ll need to give your customer new notice of the new collection date.
6. Are you collecting regular fixed payments?
For payments of a fixed amount taken at regular intervals you can give your customer a single notification containing details of the frequency and amount of each payment (e.g. letting them know that £10 will be collected on the 1st of every month).
Remember - if your payments do vary, either in frequency or amount, advance notice is needed before each one and must contain the payment date and amount. If the collection details change in any way you need to give a new advance notice.
With GoCardless, advance notice is 3 days giving you more flexibility
GoCardless takes care of advance notice for you. We make sure you send the right information to the right person at the right time.
To find out more about our reduced advance notice period and how this fits into payment timings or for more information on collecting Direct Debit payments with GoCardless, book a chat with one of our Direct Debit experts.