Direct debit ending – watch your mail

The national direct debit system ends at the end of January. Consumers should monitor their mail closely to make sure that no bills are accidentally left unpaid.

Under a decree from the EU, Finnish invoicers may no longer offer their customers the national direct debit scheme that was previously in use. With the help of the conversion service offered by banks, invoicers will be able to convert the billing of their direct debit customers into e-invoices and direct payment.

Direct payment corresponds in functionality to the direct debit system that is being shut down, and it is suitable for consumers for whom an e-invoice is not a realistic option. These consumers include, among others, senior citizens, the visually impaired, and institutionalised patients. Direct payment is also more suitable than e-invoicing for those consumers who do not actively use online banking, or who do not have access codes for online banking, a computer, or sufficient skills for handling e-invoices.

Invoicers using the conversion service have been asked to send their customers a letter explaining the change in the method of payment to e-invoicing or direct payment. Invoicers were also required to offer their customers the possibility to react to the proposed change. Normally a company that changes the method of invoicing must get the customer’s active approval, but the conversion service is a one-time exception to this main rule. The purpose of the conversion service is to make sure that there is no interruption in billing for direct debit customers in connection with the conversion so that the customers will not have to do anything themselves.

Not all invoicers have availed themselves of the conversion service offered by banks. The direct debit customers of such companies will get paper invoices in the future. Consumers are advised to keep track of all mail from invoicers to make sure that bills are not accidentally left unpaid.

The Commission proposed a change in January, according to which banks would be allowed to continue to accept direct debit payments until August. However, banks in Finland have decided to keep to the original schedule and end direct debit at the end of January. The decision is understandable, because direct debit would end soon anyway, and the new information might cause confusion and problems among consumers.

Further information:
Different forms of payment
Press release by the Federation of Finnish Financial Services, the Bank of Finland, and the Finnish Competition and Consumer Authority 23 September 2013 (in finnish)
Current Issues in Consumer Law 5/2013: Legality of charging for paper invoices to be decided by the Market Court
Current Issues in Consumer Law 5/2013: A switch to e-invoices requires the consumer’s active consent