Direct debit compliance update

Recent BCCC assessment of compliance with direct debit Code obligations revealed some concerning practices that banks must address – as well as many positive actions that could help improve compliance with these important customer protections.

The Code requires banks to take and promptly process a customer’s instruction to cancel a direct debit request. In late 2018, the then-CCMC assessed banks’ compliance with direct debit obligations with the help of a mystery shopping firm. Almost half the interactions revealed non-compliance. Some of the worst performing banks were contacted by the CCMC and urged to lift their game or face sanctions, and a number were asked to submit remediation plans. Upon review of these banks’ action plans, the BCCC identified these problems:

• Some banks place the onus on customers to say which payment type the direct debit relates to. The BCCC encourages banks to help the customer to identify this accurately.
• Transition to the 2019 Code was a catalyst for direct debit training activities, but the BCCC believes standard training remains inadequate.
• The BCCC maintains that it is important for banks to consider an online process for customers to cancel direct debits, yet there is a lack of plans to develop these.

It’s not all bad news. The BCCC shares the following instances of good industry practice and hopes banks embrace them before it rolls out the next round of mystery shopping exercises in early 2020. The actions include:

• Making it possible for customers to cancel direct debits online; making direct debit cancellation forms on websites more accessible; enhancing search functions about direct debits and recurring payments; publishing customer guidance online; and, uploading a direct debit guide.
• Staff communication can be enhanced by updating induction training programs; sending quarterly reminders to contact-centre staff to reinforce the process; emphasising the process in internal newsletters; and, providing all staff with a “suggested customer conversation” for cancellation requests.
• On the training front, actions could include compulsory monthly team ‘huddles’ about direct debit cancellation requests; role-play scenarios; and, tracking staff members’ involvement in direct debits training through the bank’s learning and development team.
• Banks could undertake their own monthly mystery shopping calls, or test team members within a branch each month. Speech analytics tools could identify and monitor calls where a customer has asked to cancel a direct debit and Quality Assurance can target direct debit calls.

Other initiatives include sending all direct debit cancellation requests to one specialised team, and conducting monthly meetings to review banks’ progress and implementation of their action plan.

The BCCC encourages all banks to review its processes and consider implementing these actions – and looks forward to seeing vastly improved compliance in this important area.