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Temporary increase of the minimum Direct Debit dormancy period

Temporary increase of the minimum Direct Debit dormancy period

As of Monday 29th June 2020, Bacs has announced that the Direct Debit dormancy period will no longer be 13 months.

As events around Covid-19 rapidly change on a daily basis, we think the latest news from Bacs is great and welcome one. From Monday, all Service Users’ will see the minimum dormancy period temporarily change from 13 months to 24 months. There is no action required by you.

As of Monday 29th June 2020, the Direct Debit dormancy period will no longer be 13 months.

What does the Direct Debit dormancy period mean?

This starts from when the last Direct Debit was collected. Currently, if you have not collected within 13 months, the Direct Debit Instruction will be cancelled and you will have to arrange for another one to be setup with the payer and an Auddis sent to Bacs.

Why is this being offered?

We have seen many Service Users’ offering a lot more flexibility around payment holiday, amounts and start dates. Having a dormancy period, especially around annual Direct Debit payers raised concerns that organisations will see higher number of unpaid items and needless have to communicate to the payer again to have this setup.

This temporary change to the rules will help a lot of organisations, with no need to amend systems and obtain a new Instruction.

In the recent communications from Bacs, they reminded us that this will be kept under review and we will of course update all our clients should this change. If you have any questions, do not hesitate to contact the Team.