European Payments Council: SEPA Direct Debit Schemes ensure complete consumer protection

The latter has issued a statement claiming that under the new SEPA Direct Debit Schemes (SDD), not enough security provisions are in place to prevent fraudsters from gaining access to consumers’ accounts. In its reply, the EPC reiterates that the SDD ensure complete protection of consumers, having been developed by the EPC in close dialogue with all market participants.

According to the EPC address, the SDD Schemes are aligned with consumer rights as defined in the EU Payment Services Directive (PSD). Additionally, the SEPA Core Direct Debit Scheme grants consumers a “no-questions-asked” refund right during the eight weeks following the debiting of a consumer’s account; e.g. during this time any funds collected by SEPA Direct Debit will be credited back to the consumer’s account upon request. In the event of unauthorised direct debit collections, the consumer’s right to a refund extends to thirteen months as stipulated in the PSD.

“The SDD Schemes are built on the same business assumptions and basic trust between the parties involved as the established pre-SEPA, national direct debit model used for decades in the majority of EU Member States. Millions of consumers, firms and institutions are making direct debit payments based on this long-standing, proven and trusted relationship model in countries such as, for example, Germany (6,9 billion direct debits in 2007), the United Kingdom (3,0 billion), France (2,9 billion), Spain (2,2 billion) or the Netherlands (1,2 billion)” EPC Chair Gerard Hartsink has stated.

In addition, banks servicing billers who collect direct debit payments must ensure that only trustworthy billers are able to collect payments via SEPA Direct Debit. This is also in the interest of banks as they would have to cover any losses resulting from fraudulent and / or erroneous direct debits.