Will Club Lloyds know I have set up 3 new direct debits?

IAMIAM

On my TSB account that I am going to use to get their £250 switch on a club lloyds account.
Set up 3 £1 direct debits on credit cards today before I apply.
They class active as paid within the last 13 months, but surely TSB doesn't tell them that?

masonic

I don't think they will be able to distinguish an active direct debit that hasn't had its first payment yet from one that has. But I am not certain. I have three that will have paid out and a fourth that has not. Lloyds usually send a fairly detailed summary of the switch, so this may give me some insight without taking the risk.

Rudyson

It's possible that last date a DD was paid will be sent to the new bank, in which case they would know.

soulsaver

I know that (at least some) banks place a 'paid' flag against DDs that have been paid out. 

ProcessMatters

The key point is that Lloyds isn’t manually judging whether a DD is “real” or “good value” — they’re checking that the switch completes with active mandates in place.

Under the Current Account Switch Service, the new bank receives the mandate details, not a running payment history going back months. Whether a DD has already paid can be visible internally, but the incentive criteria is normally met as long as the mandates are live and carried over successfully.

This is why £1 DDs on credit cards are commonly used and accepted for switches. The only real risk is if a DD hasn’t fully set up by the time the switch runs.

If the switch completes showing 3 active DDs, that’s usually sufficient.

masonic

The Lloyds offer does explicitly say they define an active DD as one that has paid out prior to the switch. But it seems rather unlikely that CASS will supply information necessary to differentiate these from other active DDs. It may be that they just rely on that statement in the event of a dispute - putting the burden of proof on the customer to provide a bank statement showing it having paid out if it does not transfer as expected. Otherwise it is very difficult to determine either way whether the DD was fully set up at the time of the switch.

IAMIAM

Can you open account and request a switch a week later?

PRAISETHESUN

IAMIAM said:

Can you open account and request a switch a week later?

When you start the switch you can select a completion date in the future, so you could set a date a week or two from now to give yourself some time for your DDs to get set up before they switch offer ends.

Ballard

I don’t know what information banks send between each other about direct debit agreements during a switch, but I’d have thought that it would include the date on which the customer originally agreed it. I’d have thought that this would be useful in the event that the customer queried any direct debit.

Just because it seems logical to me doesn’t mean that this is how it works, so I’d be interested if someone in the know can confirm or deny it. 

masonic

Ballard said:

I don’t know what information banks send between each other about direct debit agreements during a switch, but I’d have thought that it would include the date on which the customer originally agreed it. I’d have thought that this would be useful in the event that the customer queried any direct debit.

Just because it seems logical to me doesn’t mean that this is how it works, so I’d be interested if someone in the know can confirm or deny it. 

If they did have that information it would make it easy to exclude any DDs set up after the launch of the switching offer. However, that doesn't happen in practice. I can see in an account I switched to Santander a year ago, the "start date" of the DDs that were transferred is 2 working days before the switch date, in other words they were set up as new mandates during the switch and did not inherit the original agreement date.

Also, there is supposed to be a 13 month dormancy rule, in which DDs that have not pulled in this amount of time should be cancelled, but I have never seen this happen in practice (I have very old credit cards I go years without using and their DD mandates stay in place). I have had one transfer successfully as part of a CASS switch even though it had been set up on a prior account for an earlier incentive been sat there doing nothing for a couple of years AND never paid on the donor account.

My donor accounts tend to accumulate a load of old dormant mandates that carry from one to the next, as I do not rely on these switching, so always have recent/refreshed ones added when I do the next offer.

I have a DD currently set up on my main current account with a last payment date of June 2019.

friolento

I asked Gemini what DD data gets sent for a CASS switch. This is what it says. I am told you can verify  the information via 

• "Pay.UK CASS Participant Handbook": For the technical timeline and data fields.

• "Bacs Guide and Rules": For the specific logic behind Direct Debit "Sequence Types" and "Last Payment" logic.

I have not bothered checking, I just believe the Gemini information.

When a bank receives your account details during a CASS switch, they don't just see a list of names; they receive a technical data packet that defines the "State" and "Age" of your Direct Debits.

To determine if a Direct Debit has been paid before (and thus whether it counts as "active" for a switch bonus), the receiving bank relies on three specific data markers sent by the old bank:

1. The "Last Payment Date" Stamp

While the receiving bank doesn't get your full transaction history, the technical message for each Direct Debit includes the date of the last successful collection.

• The "Active" Rule: Most UK banks define an "active" Direct Debit as one that has paid out at least once in the last 13 months.1

• The Dormancy Flag: If the "Last Payment Date" is older than 13 months, the old bank may mark it as "Dormant."2 The new bank will still see the instruction, but it likely won't count toward a switch incentive.

2. The Direct Debit "Sequence Type"

Every Direct Debit instruction has a hidden "Sequence Type" code in the Bacs system that tells the bank where it is in its lifecycle:

• FRST (First): This indicates the mandate is brand new and no money has been taken yet.

• RCUR (Recurring): This confirms the mandate is established and has been paid before. This is the primary signal the receiving bank uses to verify it's an ongoing, "paid" instruction.

3. The Bacs "Advice of Wrong Account" (AWACS) History

Behind the scenes, the banks use the AWACS system. When a Direct Debit is moved, the new bank receives the Bacs Service User Number (SUN) for the company (e.g., your gym or energy supplier). By checking the history of that SUN against your mandate, they can see if it is a live, functioning instruction or a "cancelled" instruction that was never purged.

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Summary of DD Data Exchanged

Data Point	What it tells the New Bank
Service User Number (SUN)	Who the company is (e.g., Vodafone, British Gas).
Last Payment Date	Exactly when the last bill was paid.
Mandate Status	Whether it is "Active," "Dormant," or "Cancelled."
Instruction Reference	Your unique customer ID with that company.