Information for companies considering using Direct Debit and Paperless Online Direct Debits as a payment option for their customers.
The new consumer watchdog for the banking sector, the Financial Conduct Authority (FCA) has reached an agreement with seven of the UK's largest banks and building societies which will undoubtedly help consumers avoid bank charges from failed direct debits.
In the unprecedented move, Barclays, The Co-operative, HSBC, Nationwide, RBS Group, Santander and National Australia Group will begin a process whereby direct debits, Standing Orders and future dated bill payments will be retried later in the day if they initially fail due to lack of funds. Lloyd's Banking Group advised that they already operate a similar system for most payments, and are working to extend the scheme to all transactions.
The framework to move Direct Debits from one bank account to another has been around for many years as the concept of switching bank accounts is certainly not a new one. Historically, moving your current account was a little hit and miss, occasionally a direct debit wouldn't move over and you would have to contact all of the people who make payments into your current account individually to ask them to change their records.