The world of BACS and Direct Debits is littered with jargon, developed by the financial institutions, which sadly we have to use on a day to day basis. We hope this jargon buster will help you to understand some of the more common terms that may confront you from time to time!

ADDACS: The Automated Direct Debit Amendment and Cancellation Service that allows Banks to advise Direct Debit Service Users (that’s you, via us) of Direct Debit Instruction amendments or cancellations. The message is sent either electronically or on paper.

Advance Notice: A notice period of (usually) 10 working days, which is given to the Payer as notification of the date and the amount to be debited from their account.

Amalgamation of Collections: Multiple or combined payments relating to more than one contract, which are being collected under a single Direct Debit Instruction.

ARUDD: The Automated Return of Unpaid Direct Debit service allows Banks to return to the Service User (that’s you, via us) any unapplied Direct Debit collections. The debit is returned to the Service User’s account and BACS generates a report which details the returned Direct Debit and the reason.

AUDDIS: The Automated Direct Debit Instruction Service which enables Direct Debit Instructions to be electronically lodged at the Paying Bank via BACS.

AUDDIS (DDI): The AUDDIS Direct Debit Instruction is either the instruction itself or a subsequent written communication from the customer to the Service User changing the terms of the original instruction.

BACS: (Bankers Automated Clearing Services) is a not-for-profit, membership based, industry body, owned by 13 of the leading banks and building societies in the UK and Europe. It has been at the heart of the payments industry for 40 years and is responsible for the schemes behind the clearing and settlement of automated payments in the UK and maintaining the integrity of payment related services

BACSTEL-IP: This is the secure channel for accessing the BACS Payment Service. It protects data integrity and privacy with Public Key Infrastructure and smartcard technology. BACSTEL-IP also carries out some online validation of submissions.

Core Reference: Comprised of at least six alpha-numeric upper case characters, this reference is allocated by Service Users to identify a Direct Debit Instruction This core reference is then quoted in all subsequent Direct Debit collections.

DDI: A Direct Debit Instruction is an authority from a Payer to their own Bank giving a named organisation (Service User) permission to collect varying amounts from the Payer’s Bank account on variable dates agreed with the Payer.

Direct Debit Guarantee: A guarantee offered by all Banks (and building societies) that take part in the Direct Debit Scheme. “a) If the amounts to be paid or the payment dates change, the organisation collecting the payment will notify you normally 10 working days in advance of your account being debited or as otherwise agreed b) If an error is made by the organisation or your bank or building society, you are guaranteed a full and immediate refund from your branch of the amount paid c) You can cancel a Direct Debit at any time by contacting your bank or building society.”

Dormancy Period: The period (usually 13 months) after which a Bank will remove the details of a Direct Debit Instruction from a Payer’s account, if no collections have been made.

Due Date: The date on which a Direct Debit payment is due to be taken. It’s normally the same day each month, but if any payment due date falls at a weekend or on a bank holiday, the Service User is obliged to debit your account just after that due date unless they notify you in advance of a change of date.

Lodgement: The process of the Paying Bank accepting the Direct Debit Instruction

OIN (Originator Identification Number): A unique number allocated to each service user who is authorised to use the Direct Debit Scheme. This terminology has now been superseded by Service User Number or SUN

Payer: The person who has raised the Direct Debit Instruction which allows the Service User to collect Direct Debits from their Bank account.

Paying Bank: The Bank where the Payer’s Direct Debit Instruction is lodged.

Payment Cycle: The three day cycle during which a payment instruction is submitted to BACS for processing and the time it reaches the destination account. The payment cycle has three stages: input (day 1), processing (day 2) and entry (day 3).

Payment Date: The date on which the Direct Debit payment is made. This can be up to or including three working days after the due date.

Re-presentation: This refers to a Direct Debit being returned to the Service User as unpaid and subsequently resubmitted for collection.

Unpaid Direct Debit: A Direct Debit that is returned to the Service User as the payment could not be collected from the designated account –common reasons would be a lack of funds, or there being no Direct Debit Instruction set up for that account.

Unpaid Direct Debit Reason Codes: A series of codes that denote the reason for a Direct Debit being returned unpaid, either by automated means via BACS (ARUDD) or by manual advice.

Working Days: For the purposes of the Scheme, working days is defined as English Bank working days excluding Saturdays, Sundays and Bank Holidays.

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