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15/12/2010 - Student Loans Company (SLC) Direct Debit error causes graduates to overpay. Many graduates who have elected to repay their student loan via Direct Debit have been overcharged in a mix up by the Student Loans Company. 57,000 graduates are left waiting for refunds after time delays in the SLC has caused them to continue taking monthly payments long after the loan had been repaid in full. All those who have been affected would be better advised to contact their bank for a refund under the terms of the Direct Debit Guarantee rather than waiting for the Student Loans Company to correct the error.
13/12/2010 - DD Fraud up dramatically? We are sceptical over the figures however you need to prevent fraud from becoming a problem for you with good KYC (Know your Customer) processes. So far this year, 26,000 Britons have discovered that fraudsters have set up regular direct debit payments from their bank accounts, according to research from insurer, LV=. These figures seem incredibly high and if true represents a big change in the way that fraud is being used. Direct debit fraud occurs when a criminal sets up a payment from a victim’s bank account to pay for a service, such as a mobile phone account. Over the last four years, reports of such incidents have rocketed (from 6,200 in 2006) and today’s victim loses £540 on average before realising their bank account has been hijacked according to the figures published. In 2009 the number of “traditional” card fraud cases fell by 4% as fraudsters changed tactics, while direct debit fraud now accounts for around 10.6% of all identity fraud cases. The study, which was conducted by the Centre for Economics and Business Research on behalf of LV=, is predicting that the problem is set to grow to 41,000 cases a year, by 2013 Service Users have a responsibility to ensure that they check the identity of their DD customers to help prevent fraud from occurring. If there is a problem it is likely to stem from Service Users failing to carry out adequate KYC checks in some cases. Read more on this in our Direct Debit Blog. 03/12/2010 : Everything Everywhere suffer for misunderstanding their non Direct Debit collections.
Everything Everywhere has lost an appeal with the HMRC for a £4m VAT refund after courts ruled additional charges for non direct debit customers are not tax exempt. The European Court of Justice (ECJ) yesterday rejected the claim by Everything Everywhere brand T-Mobile the additional £3 charged to customers for settling bills without a direct debit should be exempt from VAT. The case relates to charges made by T-Mobile to its customers in the two years ending July 2005. Everything Everywhere had requested the VAT for these fees be returned. The EJC said the £3 charge wasn’t a “payment handling service” and was instead a charge for the principle supply of mobile phone services. A spokesperson for Everything Everywhere said: “Further to the recent ruling from European Court of Justice, Everything Everywhere is reviewing the decision and considering its options. “As all VAT has been paid when it was due, there is no additional VAT to be paid as a result of this decision.” Grant Thornton UK LLP head of London VAT Karen Robb said: “The Court took the view despite this separate charge, that there was no separate supply of payment handling services to the customers. “As a result, the additional payment has to be regarded as part of the main price of the telecoms services and be subject to VAT at the standard rate. The cost to Everything Everywhere will be significant. 19/10/2010 : European Central Bank looking for 2013 deadline for moving to SEPA Direct Debit
The European Central Bank has criticised the slow take up of the SEPA Direct Debit system and would like to see banks completing the switch to a new cross-boarder direct debit system by November 2013. The Single Euro Payments Area (SEPA) aims to simplify direct debit payments in the 27-country European Union. It would enable firms to take payments from customers' accounts in other countries and allow consumers to use their debit cards across the SEPA area. ECB executive board member Gertude Tumpel-Gugerell was critical of the projects rate of progress. Less than 10% of all euro area direct credits were processed as SEPA transfers in August this year. The share of Direct Debits in the euro area processed as SEPA Direct Debits was less than 1%. The European Central Bank is keen to have a formal agreement on payment fees rather than a loose deal and is suggesting a November 2013 deadline for the completion of the changeover. The ECB does not have final say however and the European Council and European Parliament who have the power to push this through may well not have the appetite for such a tight deadline.
15/09/2010 : Direct Debit non-payments to charities drop
The number of charity direct debit payments charity which fail have fallen to just 1 per cent of scheduled payments.
27/08/2010 : Memberwise Paperless Direct Debit event launched
Membership based organisations can see real gains from implementing Paperless Direct Debit sign up processes. Clear Academy Managing Director, Gavin Lawrence has been asked to speak at the Memberwise Paperless Direct Debit event in December. “We have been invited to speak at the event in order to help people understand not only the potential benefits of using Paperless Direct Debit but also to help organisations understand how it can be implemented. There is a misconception that Paperless Direct Debit is difficult to achieve or complicated to implement, but the truth is that it can be very simple and inexpensive.” You can find out more about Paperless Direct Debit on our dedicated page Paperless Direct Debit. Or sign up for the event via the link on the right. Clear Academy has also been given a number of places at a discounted rate, contact us for a promotional code if you are interested in attending.
06/07/2010 : Update on DDICA
Bacs have recently provided an update on DDICA (Direct Debit Indemnity Claims Automation)
More information can be obtained from the Bacs website or alternatively see our summary page DDICA
12/05/2010 : Are you up to date with the Rules?/ Change of wording to the “Direct Debit Guarantee”
Bacs, the organisation that promotes and governs the scheme issues periodical updates to the “Service Users Guide & Rules of the Direct Debit Scheme” the latest version of which was published in December 2009.
Have you got a copy of the latest version? If not it is available for download in the secure area of the Bacs website (See our links section), you will need your Service User Log In to access it.
One of the changes to be aware of is the wording of the Direct Debit Guarantee. There were a number of versions previously acceptable however Bacs have now standardised to a single version and all service users must update their materials to reflect this before January 2011. An example of the latest and only permitted version is available be clicking on:- The Direct Debit Guarantee
15/04/2010 : Cash to be used in fewer than half transactions by 2015
A new report, ‘The Way We Pay 2010 ‘, published today by the Payments Council shows a payments revolution occurred in the noughties.
15/03/2010 : Direct Debit Indemnity Claim Automation (DDICA)
Bacs is taking the opportunity to automate one of the last remaining paper based processes associated with Direct Debit, the handling of indemnity claims. The automated process will be introduced in October 2010. The impact will be:-
· Details of indemnity claims submitted available on Bacs reports · Automatic settlement of indemnity claims · Fewer opportunities for error in the process. · Potential for straight through processing (STP).
Bacs have promised further updates on this through the year, we will let you know more information here as it becomes available
23/02/2010 : What is happening with SEPA Direct Debits?
The SEPA Direct Debit Scheme is still in it's infancy and no official statistics are available but data published by interbank clearing house EBA, shows that it processed just 13 of the core (consumer) debits in December last year, and only seven of the business-to-business transactions, worth a combined total of €17,000. Consumer and business groups complain they are open to “massive fraud” and say the project can not be completed until the problems they identify have been resolved. The upshot of the argument is that it looks near-impossible to set an end date for banks to abandon their national Direct Debit Schemes and migrate all mandates across to the SEPA Direct Debit Scheme. Michel Barnier, the incoming internal market commissioner, has pledged to set a deadline to get things moving, but Andreas J. Zehnder, managing director of the European Federation of Building Societies, says, “A premature abolition of proven national direct debit transfers, which are legally compliant and are highly accepted by the consumers, would lead to significant costs and fuels uncertainty. There are no obvious reasons that could justify a deadline.” The main problem that the scheme faces is the diverse range of national schemes that are already proven and successful. In some cases (Germany for example) there is still no legal means of transferring the domestic scheme mandates across. There has been too much investment and effort put into the SEPA Direct Debit Scheme for these issues to remain forever however until they are addressed it seems as though the new scheme will continue to be dwarfed by the national equivalents.
25/01/2009 : Charities warned to be vigilant against Direct Debit Fraud
The Charity Commission is warning charities of the danger of fraudulent direct debits being set up from charity bank accounts. It has been made aware of a number of instances where this has happened, resulting in the abuse of charity funds. What can charities do?
Under the Direct Debit guarantee scheme, if the charity has been wrongly paying a direct debit, it can reclaim this money from the bank. It is then the bank's responsibility to reclaim this money from the supplier. A spokesperson for Bacs Payment Schemes Limited said: "Paperless Direct Debit is a highly reliable, safe and cost effective method for organisations, including charities, to collect regular payments. Instances of Direct Debit fraud are very low when compared with alternative payment methods like cheque or card. "We treat any instances of Direct Debit fraud extremely seriously, even when they take place rarely. We are pleased to work with the Charity Commission in providing this alert to the charity sector". Clear Academy can provide lots of good advice on how to prevent and deal with Direct Debit Fraud
16/12/2009 : The end of the road for cheques:-
Today the Payments Council Board has agreed to set a target date of 31st October 2018 to close the central cheque clearing. Over the next nine years the Payments Council will seek to promote and explain existing alternatives; and where innovation and new options are required to ensure that they are put in place. Although cheque use has been in decline since 1990, and has fallen by 40% over the last five years, there are still plenty of situations where cheques are used extensively. These include payments between individuals, and payments to sole traders, small businesses, clubs, charities and schools. The payments industry has to rise to the challenge of finding easy-to-use efficient alternatives for these payments and to ensure that they are easily accessible and well understood by cheque users. The goal is to ensure that by 2018 there is no scenario where customers, individuals or businesses, still need to use a cheque. 02/11/2009 *Updated 14/01/2009 : SEPA (European) Direct Debit Scheme Launched:-
As of the 2nd of November 2009 there is now a scheme in place to collect a direct debit across borders from non U.K. accounts within the Single Euro Payments Area (SEPA). SEPA consists of the 27 EU Member States, Iceland, Liechtenstein, Monaco, Norway and Switzerland.
*So far there has been little activity for take up of the SEPA Direct Debit Scheme it seems that there is a lack of knowledge within certain areas of the banking and payments industries as to how to implement the scheme and offer it to businesses. Until more is done by the sector to put mechanisms in place to collect then this is unlikely to change. We will be looking to add a section to this site to provide more information as this service matures and there are some realistic options available to collect. |
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