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Get to grips with Direct Debit

Direct Debit

ISBN: 978-0-470-06528-0

If you talk to customers about Direct Debit on a regular basis, this book is for you! Direct Debit For Dummies runs through the essen-tials that both you and your customers need to know. From working out which customers like using Direct Debit and helping custom-ers who don’t, to fathoming the basic pro-cesses behind the system and making sure you understand the Direct Debit Guarantee, you’ll be up to speed with all the important information in a matter of minutes.

Direct Debit needn’t be scary!

Assist Direct Debit customers

Follow the Direct Debit Guarantee

Work through the Direct Debit process

Explanations in plain

English

‘Get in, get out’

information

Icons and other

navigational aids

A dash of humour and fun

With the compliments of

Help your customers master

Direct Debit basics

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Payment Schemes Limited (BACS) has been at the forefront of delivering effi cient, reliable and secure electronic funds transfers between banks, consumers and businesses for over 40 years.

Its principal products are Direct Debit, BACS Direct Credit, and Standing Orders. These products generate over 5.5 billion transactions from over 100,000 UK businesses in a single year, with over 90 million transactions being processed on a peak day.

BACS’ success is based on its ability to provide unrivalled electronic payment services for the benefi t of banks, businesses and consumers in response to increasing demand.

www.bacs.co.uk

We recognise that product knowledge is key to the delivery of a quality customer experience. That’s why we are proud to have been associated with the Customer Contact Association Excellence Awards 2006.

Through our sponsorship of Team Leader of the Year Award our aim was to encourage and reward operational excellence and best practise amongst call centre personnel.

www.bacs.co.uk/directdebit/events

by Melanie Parris

Direct DebitFOR

DUMMIES‰

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Direct Debit For Dummies®

Published byJohn Wiley & Sons, LtdThe AtriumSouthern GateChichesterWest SussexPO19 8SQEnglandE-mail (for orders and customer service enquires): cs-books@wiley.co.ukVisit our Home Page on www.wiley.comCopyright © 2006 John Wiley & Sons, LtdPublished by John Wiley & Sons, Ltd, Chichester, West SussexAll Rights Reserved. No part of this publication may be reproduced, stored in a retrievalsystem or transmitted in any form or by any means, electronic, mechanical, photocopying,recording, scanning or otherwise, except under the terms of the Copyright, Designs andPatents Act 1988 or under the terms of a licence issued by the Copyright Licensing AgencyLtd, 90 Tottenham Court Road, London, W1T 4LP, UK, without the permission in writing of thePublisher. Requests to the Publisher for permission should be addressed to the PermissionsDepartment, John Wiley & Sons, Ltd, The Atrium, Southern Gate, Chichester, West Sussex,PO19 8SQ, England, or emailed to permreq@wiley.co.uk, or faxed to (44) 1243 770620.Trademarks: Wiley, the Wiley Publishing logo, For Dummies, the Dummies Man logo, AReference for the Rest of Us!, The Dummies Way, Dummies Daily, The Fun and Easy Way,Dummies.com and related trade dress are trademarks or registered trademarks of John Wiley& Sons, Inc. and/or its affiliates in the United States and other countries, and may not be usedwithout written permission. All other trademarks are the property of their respective owners.Wiley Publishing, Inc., is not associated with any product or vendor mentioned in this book.

LIMIT OF LIABILITY/DISCLAIMER OF WARRANTY: THE PUBLISHER, THE AUTHOR, ANDANYONE ELSE INVOLVED IN PREPARING THIS WORK MAKE NO REPRESENTATIONS OR WAR-RANTIES WITH RESPECT TO THE ACCURACY OR COMPLETENESS OF THE CONTENTS OF THISWORK AND SPECIFICALLY DISCLAIM ALL WARRANTIES, INCLUDING WITHOUT LIMITATIONWARRANTIES OF FITNESS FOR A PARTICULAR PURPOSE. NO WARRANTY MAY BE CREATEDOR EXTENDED BY SALES OR PROMOTIONAL MATERIALS. THE ADVICE AND STRATEGIES CON-TAINED HEREIN MAY NOT BE SUITABLE FOR EVERY SITUATION. THIS WORK IS SOLD WITHTHE UNDERSTANDING THAT THE PUBLISHER IS NOT ENGAGED IN RENDERING LEGAL,ACCOUNTING, OR OTHER PROFESSIONAL SERVICES. IF PROFESSIONAL ASSISTANCE ISREQUIRED, THE SERVICES OF A COMPETENT PROFESSIONAL PERSON SHOULD BE SOUGHT.NEITHER THE PUBLISHER NOR THE AUTHOR SHALL BE LIABLE FOR DAMAGES ARISING HERE-FROM. THE FACT THAT AN ORGANIZATION OR WEBSITE IS REFERRED TO IN THIS WORK ASA CITATION AND/OR A POTENTIAL SOURCE OF FURTHER INFORMATION DOES NOT MEANTHAT THE AUTHOR OR THE PUBLISHER ENDORSES THE INFORMATION THE ORGANIZATIONOR WEBSITE MAY PROVIDE OR RECOMMENDATIONS IT MAY MAKE. FURTHER, READERSSHOULD BE AWARE THAT INTERNET WEBSITES LISTED IN THIS WORK MAY HAVE CHANGEDOR DISAPPEARED BETWEEN WHEN THIS WORK WAS WRITTEN AND WHEN IT IS READ.

For general information on our other products and services, please contact our CustomerCare Department within the U.S. at 800-762-2974, outside the U.S. at 317-572-3993, or fax317-572-4002.For technical support, please visit www.wiley.com/techsupport.Wiley also publishes its books in a variety of electronic formats. Some content thatappears in print may not be available in electronic books.British Library Cataloguing in Publication Data: A catalogue record for this book is availablefrom the British LibraryISBN-13: 978-0-470-06528-0ISBN-10: 0-470-06528-1Printed and bound in Great Britain by Page Bros, Norwich.10 9 8 7 6 5

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Publisher’s AcknowledgementsWe’re proud of this book; please send us your comments throughour Dummies online registration form located at www.dummies.com/register/.

Some of the people who helped bring this book to market includethe following:

Publishing and Editorial for Consumer Dummies

Diane Graves Steele, Vice President and Publisher, ConsumerDummies

Joyce Pepple, Acquisitions Director, Consumer Dummies

Kristin A. Cocks, Product Development Director, ConsumerDummies

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Kelly Regan, Editorial Director, Travel

Publishing for Technology Dummies

Andy Cummings, Vice President and Publisher, DummiesTechnology/General User

Composition Services

Gerry Fahey, Vice President of Production Services

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Acquisitions, Editorial,and Media Development

Executive Project Editor:Martin Tribe

Development Editor:Daniel Mersey

Custom PublishingRepresentative: Scott Smith

Composition Services

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Layout and Graphics: Denny Hager, Stephanie D. Jumper, Alicia B. South,Erin Zeltner

Proofreaders: David Faust,Brian H. Walls

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IContents at a GlanceIntroduction.............................................1

About This Book.............................................................1Foolish Assumptions .....................................................1How to Use This Book ...................................................2Icons Used in This Book................................................2Where to Go From Here.................................................3

Part I: Direct Debit and Your Company......5Figuring Out Direct Debit Basics.......................................5Understanding Why Companies Love Direct Debit .....6Understanding How Direct Debit Works .....................9

Part II: Direct Debit and Your Customers...13Working Out How Popular Direct Debit Really Is.....13People Who Like Paying by Direct Debit...................14People Not So Keen on Direct Debit (Yet!)................15Dealing with Both Types of Customer.......................17

Part III: The Direct Debit Guarantee ........21Your Company Obligations to the Guarantee...........21How the Direct Debit Guarantee

Protects Your Customers .........................................23The Guarantee in Operation .......................................24

Part IV: Ten Facts About Direct Debit ......25

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Introduction

Direct Debit For Dummies tells you all the importantthings that you, as an employee interacting with

customers, need to know about Direct Debit.

If you’re the person in accounts responsible for DirectDebit, you’ll probably need more detail than this book-let provides; take a look at the ‘Service Users Guide andRules to the Direct Debit Scheme’, instead. This is avail-able by registering at www.bacs.co.uk/usingdirectdebit.

About This BookThis book helps you get up to speed with the impor-tant stuff in less than ten minutes (we appreciate howbusy call centres can be!), and we’ve remembered thatnot everyone needs to know all the admin stuff thatgoes with accepting Direct Debit as a payment method.

When you’ve finished reading through, keep this mini-book as a handy reference guide or as an essentialrefresher.

Foolish AssumptionsWe’ve written this guide for staff who talk to customersabout Direct Debit on a regular basis and whose roleincludes promoting Direct Debit to those customers.

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Perhaps you’ve picked up this minibook because:

� Your supervisor asked you to read it as its benefitswill help you offer a better customer experience.

� You’re looking for key information about DirectDebit in a quick and easy-to-understand format(because you’ve got better things to do, such asdealing with customers).

How to Use This BookDirect Debit For Dummies has four parts (and don’tworry, they’re all pretty short!):

� Direct Debit and Your Company: All the DirectDebit basics explained.

� Direct Debit and Your Customers: Explaining wholikes using Direct Debit and who doesn’t . . . andhow you deal with both.

� The Direct Debit Guarantee: All the importanttechnical stuff.

� Ten Facts About Direct Debit: A snapshot of thefacts about Direct Debit.

Dip in and out of this book at will; go directly to anysection that’s particularly relevant to you, or read thewhole book from start to finish (go on, push the boatout, it’s only 32 pages!).

Icons Used in This BookTo make it even easier to find the info you need, theseicons highlight key text for you:

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This icon highlights practical informationhelping you in your day-to-day dealings withDirect Debit. Following up on a tip might wellsave you time and money.

This icon marks especially important informa-tion about Direct Debit, useful to both yourselfand your customers.

We’ve also highlighted key terms in italics the first timewe use them, and provide a quick definition to help youalong.

Where to Go From HereThis minibook arms you with the essentials. If youhave any questions or would like to request additionalcopies of this guide, e-mail us on bacsacademy@bacsservices.co.uk.

If you need to speak to someone about any day-to-dayor operational matter regarding Bacs Services, includ-ing Direct Debit, Bacs Direct Credit, or Bacstel-lp,please contact the Bacs Service Desk on 0870 165 0018or visit www.bacs.co.uk/bacs/businesses.

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Part I

Direct Debitand Your Company

In This Part� Getting to grips with Direct Debit

� Reaping Direct Debit’s benefits

� Understanding how the Direct Debit process works

Direct Debit is a simple, safe, and speedy way fororganisations to collect payments from customers

(both businesses and individuals) automatically fromtheir bank account. This part gives the lowdownon Direct Debit, and explains how it can help yourcompany.

Figuring Out Direct Debit BasicsA Direct Debit Instruction is an authority from a cus-tomer to their own bank or building society giving anamed organisation permission to collect varyingamounts from the customer’s bank account on variabledates agreed with the customer.

Direct Debit is different from a Standing Order, but somepeople confuse the two. A Standing Order is a permission

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by the customer to their bank to make a payment of afixed amount on a specified regular date to a namedorganisation. Every time the amount or payment datechanges, the customer must take action.

With a Direct Debit, the customer gives accessto their account for variable amounts to bedebited and this is an important advantage ofa Direct Debit over a Standing Order.

Companies become a service user (meaning they’vepassed all the strict financial vetting necessary to beapproved), allowing them to put procedures in place to follow the ‘Service Users Guide & Rules to the DirectDebit Scheme’ (find out more by registering at www.bacs.co.uk/usingdirectdebit). These rulesare important for maintaining the integrity of thesystem and a consistent and reliable level of customerservice around the Direct Debit product.

If your company is not yet a service user,speak to your business bank manager to findout more.

Understanding Why CompaniesLove Direct DebitDirect Debit can make your company’s payment collec-tion more efficient, manageable, and more cost effective.

That’s why UK organisations of all sizes choose it asthe preferred method for collecting regular paymentsfrom both businesses and individuals.

Here’s a quick rundown of why Direct Debitcould be useful to your company:

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� It’s cheaper than cheque and safer than cash.

� Your company controls the date of receipt into itsaccount (not like waiting for a customer’s chequein the post!).

� Your company gets cleared funds in its account ona known date (great for cashflow).

� Time-consuming reconciliation is reduced (youraccounts people will be glad of this).

� When used in promotions, it can double the con-version rate from enquiry to sales (proven byresearch).

The following sections explain the benefits of usingDirect Debit in a little more detail.

Increased cost savingDirect Debit can cut costs in many ways, especiallywhen compared with cheques.

When a customer pays your company by cheque –even if the cheque arrives on time – you can wait for upto five days for it to clear. Then your accounts peopleneed to reconcile each of these collections manually.All of the costs associated with these repetitive tasksare drastically reduced or even eliminated simply byswitching to Direct Debit.

Greater cashflow control With Direct Debit, your accounts department knowsprecisely when the company account will be creditedwith cleared funds. This means they can forecast yourcompany’s cashflow more accurately; this is difficultwith cheques or Standing Orders, where the control ofthe payment date and amount rests with the customer.

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Ease of set upGetting your customers to pay by Direct Debit is easyand involves just a few simple steps. We won’t go intomore detail here, as you’ll have your own proceduresdepending on whether your company uses a manual orpaperless system of signing up customers. See Part IIfor more information.

Certainty of paymentOne of the major attractions of Direct Debit is certaintyof payment and knowing that the amounts due fromyour customers will be credited to your company’saccount on a certain date. Only errors and non-payments (where the collection is returned unpaid) are notified, so your accounts people can carry out reconciliation by exception.

Growth of customer loyaltyThe experience of many companies accepting DirectDebit shows that when customers choose to pay bythis method, customer loyalty increases. Instead oflooking for new suppliers, many people find it easier tosimply continue paying by Direct Debit.

Some companies have reported an increase incustomer loyalty as a result of offering DirectDebit as a payment option.

A valuable marketing toolDirect Debit is now recognised as a way of spreadingcosts and budgeting, and many consumers and busi-nesses welcome these benefits as incentives to ‘sign up’.

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What’s more, as a result of cost saving when collectingpayments by Direct Debit, many companies offer dis-counts to customers who choose to pay this way.

Security and reliabilityBuilt-in security safeguards also protect your company.Each time you collect payments from your customers,your company receives a report detailing the totalnumber and value of all Direct Debits processed and (if applicable) any amended or rejected records.

Understanding How DirectDebit Works

Regardless of how your company processespayments, the same information needs to beobtained from your customer in order for youto set up a Direct Debit:

� The name(s) of the account holder(s)

� The name and address of the customer’s bank orbuilding society

� The customer’s bank/building society accountnumber and sort code

Your company will have specially designed forms askingfor this information and authorising payments to betaken; this is called a DDI or Direct Debit Instruction.

When the DDI is complete, you agree with the customerthe date that best suits them for payment (collectiondate) and send them confirmation of the details to besigned and returned. If your company is a Paperless

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Direct Debit Service User, this information can be takenover the phone or Internet and sent directly to yourcustomer’s bank without the customer having to signanything; this makes the process a lot easier.

Because Direct Debit allows your company totake a variable amount from the customer,every time you need to change the amount orcollection date, you’ll have to notify your cus-tomer first giving advance notice (either byway of a letter or a short advice on their bill orstatement).

The payment processWhen your company wants to collect a payment from acustomer, you create an electronic file and send theDirect Debit data to Bacs via an IP connection. The filethen enters the three-day cycle shown in Table 1-1 anddescribed here:

1. Payment instructions are received on Day 1(input day).

2. All items are processed overnight by Bacs fordistribution by the banks and building societieson Day 2 to the customer’s branch (processingday).

3. Your customer’s account is debited and yourcompany’s account is simultaneously creditedon Day 3 (entry day).

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Table 1-1 The three-day payment cycle

DDaayy 11:: IInnppuutt DDaayy 22:: PPrroocceessssiinngg DDaayy 33:: EEnnttrryy

Service user sends Bank or Payments payment file to building society simultaneously Bacs for processes debited from theprocessing payment customer and cred-

ited to the Serviceuser

No money leaves the customer’s account until Day 3,and the debit appears on the customer’s bank statementon that day.

Amendments and cancellationsYour customer may change or cancel a Direct Debit atany time simply by advising their bank or your company.When the bank is notified, they will send an advice toyou, which must be acted upon immediately.

When a customer calls or writes to change orcancel a Direct Debit, action this immediatelyotherwise your company could be liable forany errors.

Refunding errorsIn the event of an error with a Direct Debit, the cus-tomer’s bank refunds the customer under the terms ofthe Direct Debit Guarantee (see Part III). If the error iscaused by something your company has done, thebank reclaims that amount back from your company.

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Part II

Direct Debit and Your Customers

In This Part� Finding out how many people use Direct Debit

� Discovering who likes Direct Debit

� Working out who doesn’t get it

� Dealing with both types of customer

With over 75 per cent of the UK adult populationhaving at least one Direct Debit, the chances are

that most of the people you speak to know somethingabout it. But that’s not to say that everyone is confi-dent in using Direct Debit. This part helps you to workwith your customers, no matter what their previousDirect Debit experience has been.

Working Out How PopularDirect Debit Really IsPositive disposition towards Direct Debit is at an alltime high and Direct Debit is now the preferred pay-ment method choice for half the bill paying population.

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23 per cent of the bill paying population are what wecall selectives (people who choose to use Direct Debitfor some bills but not others due to personal circum-stances). A whopping 50 per cent are preferrers (orpeople with a positive disposition towards DirectDebit). Not surprisingly, preferrers and selectives aremore likely than other people to recognise the benefitsthat Direct Debits bring.

So how do you know who the selectives are? Well aslong as they’re happy with your company and the levelof payment, they’re likely to sign up to Direct Debit.The preferrers are even easier; simply tell them youoffer Direct Debit as a payment option and they’ll signup without a whimper.

People Who Like Paying by Direct Debit Customer benefits associated with Direct Debit make ita popular way to pay bills:

� It’s convenient – no more queuing.

� Direct Debit allows customers to spread the costof your product over time, often on a date thatsuits them.

� Direct Debit offers peace of mind – no missed billsor penalty payments due to postal delays.

� It can often be cheaper (many companies offerdiscounts for payment by Direct Debit).

� Direct Debit is backed up by a Guarantee offeringan immediate refund if any dispute arises.

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Figure 2-1 shows that Direct Debit is favoured almostequally by men and women, and across all age groupsexcept the very young and elderly. The financially well-off are also high users of Direct Debit.

Figure 2-1: Direct Debit users.

Almost half of all Direct Debit users surveyedsaid that they would be less likely to switchservice provider than if they were using analternative payment method. So Direct Debit isa retention benefit if your company operatesin a competitive market.

People Not So Keen on Direct Debit (Yet!)15 per cent (over 6.7 million) of UK adults who have abank or building society account do not have anyDirect Debits. 12 per cent of all UK adults aged 17 yearsor more say they will not use Direct Debits (8 per centare reluctant and a further 4 per cent claim they are notable to use Direct Debit at all).

40%50%60%70%80%90%

100%

0%

76% 77% 75%

57%

82% 86% 83%78%

64%

90%85%

79%73%

44%

All adults

Male

Female

17-24

25-34

35-44

45-54

55-64 65

+ AB C1 D EC2

10%20%30%

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While the percentage is relatively small, some peoplehaven’t cottoned on to the benefits of Direct Debit. Themain issue appears to be a fear of losing control. Somecustomers think that they lose the ability to state whenthe money can be debited from their account withDirect Debit. Others don’t want to spread payments,preferring instead to pay the bill in one go so they canforget about it for the rest of the year. Our researchalso tells us about concerns customers have aboutretrieving any overpayments they might make to somecompanies.

Some Direct Debit doubters don’t even give a reason;they just don’t like using Direct Debits. These are thehardest type of customer to win over.

What we know about people who don’t have any DirectDebits set up is that they are generally less well offthan those who do. We also know that 38 per cent ofpeople who have a bank account but no Direct Debitare students. These groups feel that they can’t affordDirect Debits or can’t afford to let Direct Debits comeout of their account – because they just haven’t theconfidence that the funds are there. They are muchmore concerned about going overdrawn and the costassociated with that, and like to use traditional pay-ments methods (going to the Post Office or bank to paybills) or using cash instead.

Three main things stand out with customers who arenot keen on Direct Debit:

� They’re put off by the perceived hassle of sortingproblems out with their Direct Debit if somethinggoes wrong.

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� They have concerns about trusting the banks andcompanies (service users) in administering theDirect Debit properly.

� They have a low awareness of the Direct DebitGuarantee and what it means to them (see Part III).

The next section gives some hints on working withthese customers.

Dealing with Both Types of CustomerThe easy customers to look after are those who loveDirect Debit – they don’t need persuading or beingreminded of the benefits, they just want consistentlygood service. If a problem crops up (say, for instance,your company charges them for the wrong amount inerror, or continues to take payments from them whenthey’ve cancelled a Direct Debit), you need to sort itout for them promptly and efficiently in accordancewith the Direct Debit Rules.

More details on sorting out issues are coveredin Part III, which focuses on the Direct DebitGuarantee.

Working with customers reluctant to use Direct Debitthrows up its own issues. Where customers say theysimply have not been offered Direct Debit as a paymentmethod or that they simply don’t trust some compa-nies to manage their Direct Debits effectively, yourcompany can make a difference by the way it managesand promotes Direct Debit.

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We’ve found that organisations offering themost flexibility in payment dates have the bestDirect Debit take-up (for example, by lettingcustomers choose the date most suitable tothem; not everyone gets paid on the same dayof the month, remember!).

Offer your customers as wide a choice of pay-ment dates within the month as possible, tosuit their needs and income. More controlover when the payment is debited meansmore confidence that the money will be intheir account. You do need to check with youraccounts people before doing this though.

If you’re a Paperless Direct Debit Service User (meaningyou can sign up customers over the phone or Internetwithout having to send a paper Direct Debit Instructionout for them to sign), you may have heard some otherconcerns raised by your customers.

Here are some suggestions on how to answerthese concerns:

� The security of their information. Reassure thecustomer that all information is retained in thestrictest confidence and in accordance with dataprotection laws.

� The possibility of mistakes. Explain that mistakeswith Direct Debit are extremely rare but the safe-guards offered by the Direct Debit Guarantee areincluded in your confirmation letter in the eventof a query or dispute.

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� The possibility of fraud. For example, setting up a Direct Debit in another person’s name.Protection against this is offered by the DirectDebit Guarantee.

These answers should help you to overcome the cus-tomer’s concerns about paperless sign-up, but if not,check their address details and arrange to send a DDI(see Part I) in the post.

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Part III

The Direct Debit Guarantee

In This Part� Remembering your company obligations

� Protecting your customers

� Working through the process

The Direct Debit Guarantee (see the nearby section ofthe same name for the actual wording of the guaran-

tee) gives your customers the complete reassurance ofbeing protected by a number of safeguards, includingan immediate money back guarantee from their bank orbuilding society if money is debited from their accountin error. They also receive advance notice from yourcompany at the start of the Direct Debit agreement, andif the date, amount, or frequency of the Direct Debitchanges. And of course, the customer has the right tocancel a Direct Debit at any time by writing to or phon-ing their bank, and also letting you know.

Your Company Obligationsto the Guarantee

No money can be taken from a customer’saccount until they have been given notice(normally a minimum of 10 working days) ofthe amount, date, and frequency of payment.

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If the amount, date, or frequency changes, advancenotice of this must be given, allowing the customertime to query the change if necessary and to ensurefunds are available in their account. With Direct Debitthe customer always remains in control.

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THE DIRECT DEBIT GUARANTEE• This Guarantee is offered by all banks and building soci-

eties that accept instructions to pay Direct Debits.

• If there are any changes to the amount, date or frequencyof your Direct Debit (insert your organisation name) willnotify you (insert number of ) working days in advance ofyour account being debited or as otherwise agreed. If yourequest (insert your organisation name) to collect a pay-ment, confirmation of the amount and date will be given toyou at the time of the request.

• If an error is made in the payment of your Direct Debit, by(insert your organisation name) or your bank or buildingsociety, you are entitled to a full and immediate refund ofthe amount paid from your bank or building society.

• If you receive a refund you are not entitled to, you mustpay it back when (insert your organisation name) asksyou to.

• You can cancel a Direct Debit at any time by simply con-tacting your bank or building society. Written confirmationmay be required. Please also notify us.

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How the Direct Debit GuaranteeProtects Your CustomersOne of the key safeguards offered by the Direct DebitGuarantee is a money back guarantee. This works asfollows:

� If an error is made by the service user (yourcompany) or bank, the customer is guaranteed afull refund from their own bank branch. This isimmediate and does not require the customer toprove anything.

� If a service user takes more than they shouldfrom the customer’s account, or the customerbelieves that too much has been taken, the cus-tomer simply contacts their bank and gets theirmoney back.

� The bank then contacts the organisation collect-ing the Direct Debit, requesting repayment byway of an indemnity claim. Your accountspeople handle this process, but as the customerinterface, you should be aware that the processtakes place, to ensure a satisfactory outcome foryour customer.

Another safeguard referred to in the DirectDebit Guarantee is the right of the customer tocancel a Direct Debit at any time. To do so, thecustomer calls or writes to their bank askingthem to cancel the DDI (see Part I) and maysend confirmation to your company, so thatyou can update your records too. In any event,you will be advised of the cancellation by yourcustomer’s bank.

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The Guarantee in OperationHere’s a scenario showing a practical working of theguarantee:

A customer phones you to query their Direct Debit. Theysay that instead of taking £40, they’ve been debited £400.You suspect a keying error might have been responsible,but you’re not sure without further investigation.

Handling the call in the following way shouldhelp to leave a positive impression with thecustomer:

� Apologise that an error seems to have beenmade and you need to urgently investigate thecircumstances.

� Reassure the customer that because they paidby Direct Debit, they are protected under theGuarantee. Explain that you can arrange a refundbut a much quicker solution would be for the cus-tomer to contact their own bank branch andexplain the circumstances, asking the bank torefund the full £400 to the customer’s account,which the bank will do today.

� If the customer insists they don’t want to contacttheir bank then sort out the issue through yourown accounts department immediately, if youcan.

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Part IV

Ten Facts About Direct Debit

This part covers ten interesting facts about DirectDebit that you can use as conversation openers at

your next party! Did you know that:

� Direct Debits are the most popular method forpaying regular bills.

� 75 per cent of the entire adult UK population haveat least one Direct Debit.

� In the last 10 years, the volume of Direct Debitshas more than doubled to over 2.7 billion a year.

� Direct Debits can be used for paying a wide rangeof regular bills from TV Licence to charity givingto magazine subscriptions.

� 87 per cent of Direct Debit users agree that DirectDebits are a convenient way of paying bills.

� 82 per cent of Direct Debit users agree that DirectDebit is a safe and reliable way of paying bills.

� 7 out of 10 Direct Debit users would recommend itto a friend or relative.

� 8 out of 10 Direct Debit users agree that DirectDebit saves time.

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26

Helpful Web addressesIf you want more information on Direct Debit, check out thefollowing Web sites:

� www.bacs.co.uk

� www.bacs.co.uk/bacs/businesses

� www.bacs.co.uk/bacs/businesses/bacs+academy

� www.bacs.co.uk/bacs/businesses/sme

Or try phoning the Bacs Helpdesk on 0870 165 0018.

For more copies of Direct Debit For Dummies please call 0870 165 0018 or e-mail bacsacademy@bacsservices.co.uk.

� 9 out of 10 Direct Debit users would considerusing Direct Debit for any new future bills.

� 10 out of 10 readers agreed that their social lifeflourished when using these facts as conversationopeners at parties. (OK, maybe we made thatone up.)

07_065280 ch04_2.qxp 11/14/07 2:54 PM Page 26

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Payment Schemes Limited (BACS) has been at the forefront of delivering effi cient, reliable and secure electronic funds transfers between banks, consumers and businesses for over 40 years.

Its principal products are Direct Debit, BACS Direct Credit, and Standing Orders. These products generate over 5.5 billion transactions from over 100,000 UK businesses in a single year, with over 90 million transactions being processed on a peak day.

BACS’ success is based on its ability to provide unrivalled electronic payment services for the benefi t of banks, businesses and consumers in response to increasing demand.

www.bacs.co.uk

We recognise that product knowledge is key to the delivery of a quality customer experience. That’s why we are proud to have been associated with the Customer Contact Association Excellence Awards 2006.

Through our sponsorship of Team Leader of the Year Award our aim was to encourage and reward operational excellence and best practise amongst call centre personnel.

www.bacs.co.uk/directdebit/events

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Get to grips with Direct Debit

Direct Debit

ISBN: 978-0-470-06528-0

If you talk to customers about Direct Debit on a regular basis, this book is for you! Direct Debit For Dummies runs through the essen-tials that both you and your customers need to know. From working out which customers like using Direct Debit and helping custom-ers who don’t, to fathoming the basic pro-cesses behind the system and making sure you understand the Direct Debit Guarantee, you’ll be up to speed with all the important information in a matter of minutes.

Direct Debit needn’t be scary!

Assist Direct Debit customers

Follow the Direct Debit Guarantee

Work through the Direct Debit process

Explanations in plain

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‘Get in, get out’

information

Icons and other

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A dash of humour and fun

With the compliments of

Help your customers master

Direct Debit basics

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