Legal Direct Debit collections
This page describes, in detail, how and when we make direct debit collections.
Whilst this does describe the details of how we work, and we aim to follow those details, our main obligation is to ensure that we meet the Direct Debit Scheme rules. We may change our procedures from time to time or make collections on a different schedule to this description providing we meet the scheme rules:-
- If we make a mistake in the way we collect a Direct Debit, i.e. we have not given the agreed notice, or collected more than the amount we notified, or not collected at the right time (there are 3 working days variation allowed), then you can bounce or claw-back the Direct Debit, and we will not charge you the admin fee we normally charge for this. We would rather sort this without a claw-back so please contact accounts first if you believe any mistake has been made.
- If you are paying by Direct Debit, and we fail to collect the amount due within the payment terms of your invoice, then we will not charge the late payment interest or penalty that would normally be due for your paying late. However, we only offer to try one collection within the terms - if that collection fails due to your having insufficient funds or any other issue outside our control, you need to take steps to ensure your bills are paid on time to avoid interest or penalties.
- Direct Debit collection is separate from invoicing. If you think we have made a mistake in an invoice, tell us, and we will correct it (and change or stop any Direct Debit collection due if there is time). The Direct Debit Scheme rules do not relate to invoicing or the quality of the services we provide, just the mechanics of how and when money is collected from your bank and the notice you are given.
Please do read the Direct Debit Guarantee for more details of your rights within the Direct Debit Scheme.
There are several ways you know we are going to make a Direct Debit collection.
- 5 working days
- As detailed in the Direct Debit Instruction we will give at least 5 working days notice of collection.
- Regular payments
- If you are paying the same amount every billing cycle, we tell you that we will collect that amount regularly, then you do not get a separate notice each time. If the amount or date changes for some reason then we send a new 5 working day notice.
- Urgent payment
- In some cases you can agree that we take a payment as soon as possible, which is 2 working days. This would either be for something like a top-up on your usage where the order page confirms with you the 2 working days, or if you agree directly with the accounts department. This only applies for an individual payment agreed directly with you on each occasion.
- If your Direct Debit fails, we can re-present it promptly, it may be as little as 2 or 3 working days after the original payment as per the scheme guidelines. We normally tell you of the failure and when we will be re-submitting the collection by email.
- Working days are Banking days as defined by BACS which are, in practice, Monday to Friday except English bank holidays. Some banks outside England will delay the payment to the next working day if there is a national holiday in your region, but some do not. It depends on the bank.
- We aim to give 5 full working days notice, so if we are giving you notice after 9am on a working day we don't count that day. E.g. notice 10am on Monday will be for collection a week on Tuesday (assuming no bank holidays).
- We give notice by email sent to the email address recorded when you set up the Direct Debit. This does not have to be the same as the A&A account holder as it is possible for someone else to be paying an account. The notice is to the bank account holder.
- The collection will normally be exactly on the date we have said. In the case of a regular notice, e.g. "Monthly on 1st" it will be the working day on or after that date. However, the rules do allow us to collect up to and including 3 working days later. This would normally only happen if there is some issue submitting the request to the bank. Any later and we have to send a new 5 working days notice of collection.
- Some times where a new Direct Debit is being set up, the collection we have notified may have to be delayed (within the 3 working days allowed, as above) to ensure the Direct Debit Instruction has been filed with the bank.
In this document we will refer to payments being collected monthly on 1st, but in practice there are several billing cycles. Some of these are Monthly on last day, Quarterly, Every 4 weeks, and even Every full moon. The same rules apply generally to these different billing cycles but obviously the wording of the notice varies accordingly.
The credit terms on your account can interact with when Direct Debits are collected. The whole notion of credit terms and Direct Debit is rather odd, as credit terms are time to make payment which is in our control when payment is by Direct Debit - however we do allow credit terms and Direct Debit, and this gives people time to check invoices before payment is taken. The credit terms you have are a matter to discuss with our accounts department. The aim of Direct Debit collection is to ensure you pay within the credit terms agreed.
Even where you have some credit terms there may be cases where individual invoices are issued on different terms. In some cases an invoice may have longer or shorter payment terms. On services with an automatic top-up that invoice is normally issued with very short, or immediate payment terms.
In any case, whatever the credit terms are, if the collection of the Direct Debit would be impossible within the terms because of the rules on giving notice, we automatically extend the terms to fit the earliest date that we could make the collection. The helps ensure we are not late in collecting payment so as to ensure you are not liable for any late payment penalties or interest.
Balance of account
Whilst most customers are invoiced every month, and then pay by Direct Debit every month, there are many customers that have ad-hoc invoices at various times of month. Even regular billed customers may have one-off additional invoices or credit notes. The Direct Debit collection system we operate aims to collect what is due on your account. It is not simply collection of a fixed amount each month. So if there are extra invoices then there may be a collection of a different amount or at a different time. In any case you will get the required notice.
The basic collection notice system
We check your A&A account regularly if there is a balance, and we work out if you need to have a Direct Debit collection scheduled. If you do, we send notice, if required, and set up the payment on your account. This shows your account has having had a payment at a date in the future. If you are sent an invoice at this point it will show as paid or payment scheduled. We aim to send the invoice after setting up any collection that is also due so that the invoice confirms the Direct Debit collection is scheduled. Remember the invoice may be sent to a different person to the Direct Debit notice.
Up to the evening of two working days before the payment date it is possible for accounts staff to remove or change your payment if needed. If there is any issue with the payment or you think there will be a problem then please contact the accounts department immediately. Once this point is passed the payment is committed and will go through. It is possible for you to have your bank reject the payment if necessary, but obviously if the collection is not a mistake on our part then we will charge an admin fee.
Any time of month collections
Most people have the Direct Debit Instruction set up for collection as needed, at any time of the month. So, when we check your account we look at when your payment is due. If this is within around 10 working days time we schedule a collection on 5 working days notice. The reason for this extra time is that we are trying to leave enough time to re-schedule a collection if the payment fails before your invoices become over due. However, the amount we collect covers any amounts due within a few more days further - this is to avoid having to do collections every few days if you have lots of invoices due over several days in a row.
Collection on specific days of the month
Some people ask for us to collect on a specific day of the month. We aim to meet this but cannot guarantee it.
- As explained, we try to adjust credit terms to fit when we can make a collection. In the case of a fixed date for collections we set due date on invoices to be first date you have asked for after the invoice date, or working day if later (or later still if that would be too soon to give a DD notification). This ensures that your payments will all be due at the same time and on the date you have asked for.
- When we schedule the payment, we do not allow the extra margin for a second attempt (as described above). This means the payment will ideally be on the day you have requested.
- The amount we collect is any invoices due before the following month's collection date, though usually there will not be any invoices with later collection dates on your account. This avoids a second collection on a different date.
- An ad-hoc urgent payment can still be collected on 2 working days notice as agreed.
- An urgent invoice for auto-topup without the usual delayed due date will cause a collection on 5 working days notice at any time of month.
This does mean that if you have longer payment terms, e.g. 30 days, and pick a date for collection, that will normally mean collection before the end of the credit terms (i.e. on the date you have chosen). This is, of course, perfectly sensible as the terms define the last date collection can be made without being late, so payment can be made any time before the due date.
All of the above applies to normal payments and notice. Each time we notify you of collection we also look to see if the payment appears to be a regular payment. So, if the current payment is being notified on the billing cycle (e.g. 1st of month), and the previous payment was notified on the start of the previous billing cycle and exactly the same amount, then we tell you in the notice that you will have that amount collected each month (or billing cycle). The next month, when notifying payment, if the amount is the same we collect immediately (2 working days) with no extra notice.
If a payment does not fit what we notified, i.e. is the amount or date are not what we notified, then the regular payments are stopped and a new 5 working days notice given for each payment again.
However, in order to try and collect monthly on the 1st where we invoice monthly on the 1st, we have to set up the payment 2 working days before the 1st.
- Two working days before the 1st we do a dry run of the invoice for the 1st and check it will be the same amount. If not, then we do not scheduled the payment for the 1st. If it turns out the payment is the same somehow then the payment will be set up without notice (as we have told you we will be collecting that payment each month) but it will be 2 working days later (so within the 3 working days allowed for notice). If it turns out the payment is different then this goes to the normal 5 working days notice and not a regular payment.
- There is a possibility that the account is changed between checking the invoicing 2 working days before the 1st, and the actual invoice. If this means we have under charged, then the difference will be notified on 5 working days because it is a balance on the account. If this means we have over charged, then a refund is issued automatically (see below).
Over charges and refunds
It is possible for a change to your account, e.g. a credit note, or a change to billing (as described above), to happen after a Direct Debit collection has been set up and so leaving your account in credit (i.e. we collected too much). This normally results in a Direct Debit having an unallocated amount, and hence some refund due. We do take in to account any billing expected in the next couple of days though, so will not refund just before a new invoice is due.
When this happens, if the Direct Debit is not yet sent to the bank, we cancel it, and if necessary re-issue a new Direct Debit with the 5 working days notice. We email you to advise you that we have done this.
If the Direct Debit has already been send to the bank, we wait until it has cleared. Then, if it is within the last 3 months, we will refund the extra that had been charged back to the same bank. Again, we email to let you know this has happened.
This is all automatic. In any other circumstances we may manually send a refund, which can take additional time, or you can contact our accounts department to arrange a refund.
You can set up a Direct Debit Instruction on the accounts pages on-line, and can also change or cancel your instruction. We also receive notice if your bank change or cancel your Direct Debit.
The notices we send, for setting up a new Direct Debit, changing a Direct Debit, Collection, Refund, or failed collection notice, are all emailed to the contact email address you specified on the Direct Debit Instruction. The email is digitally signed plain text with a separate PDF attachment to make it easy to print or file.
Some times we ask you to sign a paper instruction, which can be down to the way your bank works, or if you have multiple signatories on your account. We provide a freepost envelope for returning the instruction, but this does all add some extra days before the first collection can be made so you may have to pay initial invoices by other means. Even if a Direct Debit is already set up and working, we may in some cases ask you to sign and return an instruction on paper.