How to carry them out

In order to make payments by direct debits all that is necessary is to:

  • Agree with the creditor to use this method of payment/collection – direct debits are not a compulsory payment service, and so no one is obliged to accept their use;
  • Enter into a payment service agreement with your payment service provider to enable direct debits to be made – this agreement must provide for the rights and obligations of both parties (i.e. the debtor customer and the payment service provider) in the execution of this service.


How to grant a direct debit mandate

The agreement between the debtor (payer) and the creditor (payee of direct debits) implies that the debtor grants the creditor a direct debit mandate in order to enable the creditor, through his or her payment service provider, to initiate debit transactions in the payment account indicated by the debtor.

The direct debit mandate must contain the following fields, duly filled:

  • Name of the debtor;

  • IBAN (international bank account number) of the payment account to be debited;

  • Name/designation of the creditor;

  • Reference of the direct debit mandate;

  • Identification code of the creditor;

  • Address of the creditor;

  • Type of payment: recurring payment or single or occasional payment;

  • Date of the subscription of the direct debit mandate;

  • Signature of the debtor.

Direct debit mandates must always be signed by the debtor and be granted in paper or electronic form.

Direct debit mandates granted over the telephone or through purely verbal agreements are not valid.

The direct debit mandate must be granted to the creditor and cannot be given directly to the debtor’s payment service provider.

However, some creditors may provide their debtor customers with the possibility of activating a new direct debit mandate via the ATM or homebanking of their payment service provider by entering the references given by the creditor.


How to control direct debit mandates

Debtor customers have at their disposal a set of mechanisms that allow them to monitor the mandates granted.

Consumer debtors can:

  • Establish time limits: debtors can impose a date from which they do not accept collections under a given direct debit mandate. This limitation may be made by debtors through the ATM (in the case of domestic direct debits) or through their payment service provider;

  • Define the frequency: debtors can inform their payment service provider that a given debit mandate can only be used according to a certain frequency (e.g. monthly or annually);

  • Impose maximum amounts: debtors can set a ceiling for the amount of collections made under a given direct debit mandate. This limitation may be made by debtors through the ATM (in the case of domestic direct debits) or through their payment service provider;

  • Create positive and/or negative lists of creditors: debtors have the possibility, through their payment service provider, of restricting direct debit collections to a limited group of creditors (creating ’positive lists of creditors’) and/or prohibiting direct debit collections from certain creditors (creating ‘negative creditor lists’);

  • Order total block: debtors can ask their payment service provider not to make any direct debit collections through their payment account.

Debtors who are not consumers must contractually establish the conditions and guarantees applicable to their direct debits with their payment service provider.

Payment service providers are not obliged to provide their customers, free of charge, with the functions for setting limits to direct debit collections, except in those cases where these limits are made by the debtor through the ATM.


How to change direct debit mandates

Debtors may at any time change the payment account to be debited by the creditor:

  • If the new account is based in the same payment service provider, the indication of the new IBAN is sufficient. This change has to be made with the creditor, and it is recommended that a new debit mandate be signed as the change involves one of the mandatory fields (IBAN). The debtor’s payment service provider only becomes aware of the change after the first collection is made;

  • If debtors wish to change the payment service provider through which the direct debits are made, they must:

    • Sign a new direct debit mandate with the creditor;

    • Have a payment service contract that allows the execution of direct debits with the new payment service provider.


Cancelling and inactivating direct debit mandates

Debtors may at any time cancel a direct debit mandate with the creditor.

Debtors may also suspend a direct debit mandate with their payment service provider, namely through the ATM. Although reversible, this action prevents collections from being made on the debtor’s account. However, rendering a debit mandate inactive has no effect on the relationship between debtor and creditor, who must be informed, under penalty of breach of the agreement entered into between them.