A Direct Debit Mandate—also known as a Direct Debit Instruction—is a formal authorisation that allows an organisation (the Service User) to collect payments directly from a customer’s (Payer’s) bank account. It sets the foundation for a secure and flexible payment arrangement between both parties.
Mandates are standardised and fall into three key categories:
- Future Payments Authorisation: The mandate allows the Service User to collect payments of any amount at any time, as agreed.
- Advance Notification Requirement: Customers must be notified of each payment before it is collected, ensuring transparency and control.
- Direct Debit Guarantee Protection: All payments are protected under the Direct Debit Guarantee, which safeguards customers against errors or unauthorised transactions.
How Can Customers Complete a Direct Debit Mandate?
Customers can complete a mandate using one of the following methods:
- Paper Mandate
This is the traditional method where the customer fills out and signs a physical Direct Debit mandate form. The form typically includes:
- Customer name and address
- Bank account number and sort code
- Authorisation signature
Once completed, the form is returned to the organisation for processing. This method is still widely used and provides a tangible record of consent.
2. Paperless Mandate
This modern approach allows customers to authorise Direct Debit payments without signing a physical form. There are two main paperless options:
- Online Sign-Up: Customers enter their details through a secure online portal. The system captures the necessary information and confirms the mandate electronically.
- Telephone Sign-Up: An authorised representative reads a standardised Paperless Direct Debit script to the customer over the phone. During the call:
- The customer’s name, address, and bank details are collected.
- The Direct Debit Guarantee must be read aloud or offered to be sent to the customer.
- The details are then entered into the London & Zurich (L&Z) portal to activate the mandate.
Both paperless methods are compliant with Bacs regulations and offer a convenient, fast, and secure way to set up Direct Debit payments.
If you have any further questions, please do not hesitate to contact customer.services@landz.co.uk