SEPA Mandate Creation
The SEPA direct debit mandate authorizes a payee (creditor) to collect one or more direct debits from the account of a payer (debtor). However, a direct debit mandate is only valid if it has been created in accordance with the specifications of the European Payments Council (EPC). These define the form and content of the SEPA mandate, which must be complied with.
Formal requirements
A SEPA mandate must always be in writing. Verbal or telephone direct debit commitments are not valid and do not entitle the creditor’s financial service provider to collect direct debits. To comply with the written form, prefabricated SEPA direct debit mandates can be used, but the mandates themselves can also be created. According to EPC guidelines, both paper and electronic mandates are valid. Telecommunicative mandates, which were created by e-mail or fax, are also valid as long as they comply with the written form and contain the personal signature of the debtor. In general, direct debit mandates are only valid if they are signed and dated by hand. Direct debit mandates must always be written in the national language of the debtor, otherwise they lose their validity. If the creditor does not know the language of the debtor, the mandate may also be written in English.
Content requirements
Each direct debit mandate must contain a standard authorization text. This authorizes the payee to collect payment amounts from the debtor’s account and instructs the debtor’s bank to honor the SEPA direct debits. Furthermore, the authorization text must contain an indication of the duration of the direct debit authorization. Debtors can authorize one-time, repeated or permanent direct debits. In addition to the handwritten signature, the personal details of the debtor are indispensable for the creation of the mandate. This includes the account holder’s name, address and account details (IBAN and BIC). Other necessary information includes the name and address of the payee, his creditor identification number and the mandate reference of the transaction. A direct debit mandate for a SEPA core direct debit also requires the legal instruction of the debtor about the possibility of returning the direct debit within eight weeks. This instruction is not required for the SEPA B2B direct debit.
