Bounce a Direct Debit

BrandNewYear

When a Direct Debit fails to be honoured how long before the company is notified that the payment has failed? Do they know instantly or is it more like a cheque where they're not notified for a few days?

Hazzanet

They know next day.

Buzby

Depends. If they sent a tape to an agency (for billing) it can be a day or two before the ones that fail are reported. If they are using an online service, they know the moment the transaction is declined.

YorkshireBoy

For further information google 'ARUDD report'.

That's the "Automated Return of Unpaid Direct Debit" system used by banks to notify DD originators when things go wrong!

Hazzanet

Buzby wrote: »

Depends. If they sent a tape to an agency (for billing) it can be a day or two before the ones that fail are reported. If they are using an online service, they know the moment the transaction is declined.

Certainly in the BACS world, tapes have long gone. It's all done through the BACSTEL-IP service; most BACS Approved Bureau take submissions via the internet in some form or another (FTP-S or HTTPS) convert the data to BACS XML for submission via BACSTEL-IP.

The ARUDD is <usually> available next working day; Direct Submitters would usually import that immediately, as would a BACS Approved Bureau (an indirect submitter). It's then up to the end user to act on the information provided, but it would be available to them on date of receipt.

Source: I've had the dubious honour of going through many ARUDD, REFT, ADDACS, AWACS, and AUDDIS reports in order to 'problem solve' in my current role.