Direct debit is a cost effective and easy way to collect payments for various goods and services. It's incredibly secure and reliable, and with Split even faster and easier.
Within the direct debit request (DDR) rules which form part of the Bulk Electronic Clearing System (BECS) procedures of the Australian Payments Clearing Association (APCA) are clear guidelines on how to handle claims and cancellations of authority.
When your customers agree to the DDR and DDRSA, they are instructed to contact either yourself or Split Payments in the event of a claim. However, they are within their rights to submit a direct debit claim directly with their bank.
What happens then?
As the third party service provider, Split will be contacted by our sponsoring financial institution notifying us of a claim. Split will then take the following steps:
- Pause all future transactions scheduled for that account
- Immediately contact you (the client) via email, seeking proof of authority as well as proof of purchase of goods or services. This is to be supplied within 24 hours.
- If you would like to dispute the claim, we will provide that information to our financial institution, and will un-pause that account once we have reached a consensus with the bank.
- Alternatively, if you accept the claim we will return the funds and debit your account for the claimed amount.
Cancellation of Authority
If a customer that has authorised a DDR decides they no longer want to allow direct debits from their account, it is their right to cancel the DDR directly with their bank.
- The agreements between Split, you and the customer do not override a customer’s rights between themselves and the bank to withdraw any direct debit authority given to a third party.
- By notice to the bank a customer can instruct their bank not to accept a particular debit request.
- While it is desirable that a third party debit user be notified by the account holder of any withdrawal of authority, and while DDR service agreements will request customers to direct such requests to the debit user, a bank is required to comply with any instruction from its customer countermanding a DDR, whether or not that instruction has also been sent to the debit user.
What happens if a customer cancels their DDR?
As the third party service provider of direct debit, Split will be contacted by our financial institution notifying us of a cancelled authority. Split will then take the following steps:
- Split will immediately cancel all future transactions and agreements associated with that account.
- Split will notify you (the client) by email that the authority has been cancelled and to not schedule any further payments to that account.
If you believe that the cancellation of authority was done in error or you would like to re-establish a DDR with your client, you will need to have them re-approve an Agreement or Payment Request.
If you have any further questions please don't hesitate to contact us.