Bacs has recently sent out a reminder to all AUDDIS Direct Debit Service Users that from January 2013 there is a rule change.
All Direct Debit service users who are generating an AUDDIS 0C (cancellation) message to the old bank following receipt of an ADDACS (Advice of Direct Debit Amendment and Cancellation Service) message containing a reason code 3 must review their processes.
If your Direct Debits are managed by Rapidata, you can ignore these emails from Bacs as Rapidata has updated its processes to ensure these changes are adhered to.
Bacs has published the following useful advice:
Under what circumstances is this likely to happen?
- When an account holder switches their bank account, the new financial institution will help switch regular payments (including Direct Debits) to their new account
- The new financial institution sends an ADDACS advice with reason code 3 to each service user collecting Direct Debits from the old account
- The ADDACS advice contains details of both the old and new account. It is the authority for the service user to update their records. Under the Scheme Rules the service user must action these advices immediately or within 3 working days
- Additionally, AUDDIS service users are required to send a 0N transaction to the new financial institution to set up the Direct Debit Instruction on the new account. Under the Scheme Rules service users must submit the 0N transaction within 10 working days (of receipt of the ADDACS advice)
- Whilst not required under the Rules, some service users also send a 0C transaction to the old financial institution. This transaction serves no purpose as the old financial institution will cancel the Direct Debit Instruction automatically when it closes the account or when advised to do so by the new financial institution
Why are the rules changing?
- A new Account Switching Service is being introduced in 2013 that will include a number of new features including the ability, in some instances, to redirect Bacs transactions for a period of time
- Where the redirection facility is used, this will include AUDDIS transactions such as 0C’s to ensure other Bacs services such as Bulk Change continue to operate effectively
Why should service users change their processes?
- It is possible, in certain circumstances, that the 0C transaction could cancel the Direct Debit which has been set up as a result of submission of the 0N transaction following an ADDACS reason code 3 advice
- This could result in a subsequent Direct Debit collection failure – something that won’t benefit service users or their customers
Does this rule change affect all AUDDIS Direct Debit service users?
- Not all AUDDIS service users will have to make changes. A service user that doesn’t generate a 0C transaction as described above, has nothing to do.
Where can service users get further information?
- For information about AUDDIS and Account Switching processes see The Service User’s Guide and Rules to the Direct Debit Scheme (sections 15 and 17)
- The AUDDIS process is described in The AUDDIS Service Definition
- These documents are all accessible from the subscriber library in the resources section of the Bacs website. To access them you will require access to the password protected area of the website. If you have not subscribed for a password to access this do so now.
- Service users are STRONGLY ENCOURAGED to review their own systems but if they have any specific questions or concerns they should contact their sponsoring bank.
The change becomes effective from January 2013
Is now a good time to contact us for a no obligation quote to manage and process your Auddis and Direct Debits?
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