PSR CP17/1: Direct Debit Facilities Management – Switching service provider
We are consulting on provisional conclusions and proposals to change the Direct Debit rules relating to the switching of Facilities Management providers.
What is a Direct Debit Facilities Management service provider (FM provider)?
Organisations wishing to collect money from their customers via Direct Debit (such as charities and local councils) must be approved, or ‘sponsored’, by a bank or building society who is a Bacs member.
Organisations that do not want to or who are unable to get sponsorship, can use an FM provider to collect funds from their customers’ accounts by Direct Debit on their behalf. Organisations that opt to use an FM provider are referred to as FM clients and are typically smaller organisations such as smaller and medium enterprises, clubs and societies.
Why are we consulting on this?
We are concerned with the difficulties that some FM clients currently face when trying to switch FM providers. We are concerned this may be inhibiting fair competition.
We consider that it is possible for an existing FM provider to raise barriers to an FM client switching to another provider. This may have a detrimental impact on FM clients and their customers, on competition between FM providers and on innovation.
Who is this consultation relevant to?
This document is most relevant to:
- providers (and prospective providers) of Direct Debit Facilities Management services (‘FM providers’)
- the Bacs member banks who sponsor FM providers
- users (and prospective users) of Direct Debit Facilities Management services (‘FM clients’)
- BPSL, as the operator of the Bacs system (which includes the Direct Debit scheme)
A note on terminology - 'service user' and 'service-user'
In the rules relating to the Direct Debit scheme, the term ‘service user’ has a narrower definition than the more general ‘service-user’ term in FSBRA.
- In the Bacs rules relating to the Direct Debit scheme, the term service user is ‘A company, group of companies, charity etc. that is sponsored to use one or more Bacs services. A service user may also be referred to as a payee. (See also Originator)’.
- In FSBRA, service-users are those who use, or are likely to use, services provided by payment systems. The FSBRA definition of service-users therefore includes both Bacs ‘service users’ and FM clients, for example.
What are the next steps?
We welcome stakeholder’s views on our proposals by 15 September 2017
You can send us your comments and responses to our consultation questions by emailing us at DDconsult@psr.org.uk or write to us at the following address:
Payment Systems Regulator Limited
Direct Debit consultation team
25 The North Colonnade
London E14 5HS