Validating bank information
As the number of Direct Debits processed increases, the need to ensure that data sent via the Bacs service is clean and free of error becomes more important. Entries with incorrect account numbers quoted are usually rejected either by Bacs or the receiving bank and returned as unpaid or unapplied.
It costs both time and money to correct data that has been rejected and for the payer this can cause inconvenience and loss of confidence in the system. Indeed wrongly applied Direct Debits, particularly Paperless Direct Debits, are a major inhibitor in persuading potential Direct Debit customers to sign up with you.
Problems with incorrect data:
- Subsequent payment runs may be affected
- It needs to be amended, wasting staff time
- Mistakes lead to poor customer and staff relations.
Why validate bank information?
Increasingly organisations need access to bank related information via their payment systems. Typically they want to be able to check the accuracy of account details in their electronic payments. This is particularly important with Paperless Direct Debit sign up where you need to be able to instantly ascertain that bank account details are valid.
Use the industry sort code directory and modulus checking to make sure customers' account details are taken even more accurately at the point of sale. This helps to reduce the number of returned payments and the costly correction process that usually follows, plus it enables you to offer a better service to your customers.
Industry sort code directory
A data file of valid bank and building society sort codes which are regularly updated and can be incorporated in payment systems. All Bacs approved software packages include this validation.
Modulus checking
Available in printed form with a data table on diskette, or incorporated in payment software packages, these tables confirm that the account number quoted is valid for the accompanying sort code. (They do not verify that the account is correct for the named beneficiary).
There are a number of ways you can utilise these services. They can be easily embedded within your systems to capture errors before creating payment files. Alternatively they can sit alongside your existing database and payment applications for immediate online checking of data when you are talking to your customers.
Remember: If you submit files to the Bacs service without checking your data, you are risking not only undermining the image of your organisation, but also the confidence of your customer in Direct Debit.