Prior to the Direct Debit procedure, some agreement(s) would usually have been concluded with:
– Agreement between the Creditor and his Bank (mainly to specify the conditions of credit and the kind of direct debit).
– Agreement between the Debtor and the Debtor’s Bank (i.e. pre-authorization and condition of debit), or between the Creditor and the Debtor.
A Direct Debit is sent by the Creditor to the Creditor’s Bank instructing it to claim specified amount(s) from the Debtor(s)and to credit the amount(s) to an account specified in the message, which the Creditor’s Bank services for the Creditor in settlement of the referenced transaction(s).
Throughout this document the term ‘Creditor’ refers to either a Beneficiary or a Payee, likewise the term ‘Debtor’ refers to either an Ordering Customer or a Payor.
The term ‘Bank’ may be interpreted as any financial institution.
The term ‘pre-authorization’ refers to an agreement between a Creditor and a Debtor for:
– Either automatic debiting, as required,
– Or for debiting unless rejected by the debtor in a period of time.
The agreement can also be made between the debtor and his bank,independently of the amount of the DIRDEB.