On 4 May 2015, the European Payments Council () published the ‘Clarification Paper on the Use of Electronic Mandate Solutions’ (see ‘related files’ below). The purpose of this document is to clarify some implications of the use of electronic mandate solutions for the creditor (biller) and the debtor (payer) with regard to collections under the Direct Debit (SDD) Schemes. Specifically, the paper addresses possible risks for the creditor in the event that he or she is unable to prove that a legally binding electronic signature was provided.
To give some background: the and Business to Business (B2B) Schemes allow a creditor to collect funds from a debtor’s account, provided that a signed mandate has been granted by the debtor to the creditor. A mandate is signed by the debtor to authorise the creditor to collect a payment and to instruct the debtor’s bank to pay those collections. The SDD Rulebooks provide the possibility to issue mandates created through the use of electronic channels – often referred to as electronic mandates.
It is widely recognised that the efficient handling and the acceptance of electronic mandates is a very important element for the further development of the and B2B Schemes. In October 2013, the published a clarification letter (see ‘related links’ below), which highlights that the signature methods as described in section 4.1 (‘The Mandate’) of the Rulebook version 7.2 and the Rulebook version 5.2 currently in effect (see ‘related links’ below) are not exhaustive. The clarification letter, published in October 2013, emphasised that SDD scheme participants, (i.e. payment service providers that have formally adhered to the SDD Schemes), may consider allowing continued usage of other legally binding methods of signature including those that were used under the local legacy scheme rules. (Note: the wording in section 4.1 (‘The Mandate’) in the Rulebook version 8.1 and the Rulebook version 6.1 to take effect in November 2015 has been amended to read as follows: “Alternatively, the mandate may be an electronic document which is signed using a legally binding method of signature.” The links to the SDD Rulebooks to take effect in November 2015 are included in the ‘related links’ below.)
The ‘Clarification Paper on the Use of Electronic Mandate Solutions’, published in May 2015, details relevant provisions of European Union legislation applicable to mandates. It also highlights various aspects, including, for example, the differences in using electronic mandate solutions under the or Schemes, relevant to creditors and debtors. The ‘Clarification Paper on the Use of Electronic Mandate Solutions’ also reiterates that in the event of the debtor’s claim that an SDD collection was unauthorised, it is the debtor bank that has the final say in the assessment of the validity of an SDD mandate.
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