PSR publishes consultation on Direct Debit Facilities Management: Switching providers

The Payment Systems Regulator has published its Consultation on provisional conclusions and proposals to change the Direct Debit rules relating to the switching of Facilities Management providers.

Organisations wishing to collect money from their customers via Direct Debit (such as charities and local councils) must be approved, or ‘sponsored’, by a bank or building society who is a Bacs member.

Organisations that do not want to or who are unable to get sponsorship, can use an FM provider to collect funds from their customers’ accounts by Direct Debit on their behalf. Organisations that opt to use an FM provider are referred to as FM clients and are typically smaller organisations such as smaller and medium enterprises, clubs and societies.

Why are the PSR consulting on this?

The PSR is concerned with the difficulties that some FM clients currently face when trying to switch FM providers. The PSR is concerned this may be inhibiting fair competition.

The PSR considers that it is possible for an existing FM provider to raise barriers to an FM client switching to another provider. This may have a detrimental impact on FM clients and their customers, on competition between FM providers and on innovation.