Direct Debit (Lastschrift) in Germany
Direct Debit (Lastschrift) is a very common means of payment in Germany both
for regular payments of uncertain value (like the monthly phone or utility bill)
and one-off payments like a catalogue or internet order.
Two direct debits systems: Einzugsermächtigung and Abbuchungsauftrag
There are two different kinds of direct debit (Lastschrift) in Germany, but
the first one is by far the most common:
- "Einzugsermächtigung"
The most common form where
you authorize the payee to debit your account either for a fixed
amount, for any future invoice or for recurring payments. Before a payee
is authorized to process direct debit payments through his bank, he has
to sign an agreement to the extent that he will only process direct debits
where he has received the appropriate authorization, among other things.
Normally, only creditworthy customers in good standing are approved for
direct debit processing.
The payer´s bank does not check
the legitimacy of incoming direct debit payments but disputed items can
be returned by the customer for some time (see below).
- "Abbuchungsauftrag"
This one is hardly ever used with
private customers and only rarely between businesses. The difference is
that the payer authorizes his/her bank to honour direct debit requests
from a name payee. The bank then checks incoming direct debits flagged as
"Abbuchungsauftrag" to see if a matching authorization by the
customer is held on file, otherwise the direct debit is returned marked
"No authorization on file".
The advantage for the payer is
that the payee does not have several weeks to dispute a debit, as long as
his authorization is on file at his bank. In case of fraudulent Abbuchungsauftrag-direct
debits, there is of course still legal recourse, but outside the payment
system.
Returning direct debits (Lastschrift-Rückgabe)
Many people who first come into contact with the principle of direct debits
in Germany are a bit surprised and fear that to sign a direct debit authorization
gives just about everybody the opportunity to drain their accounts. Naturally,
reality is far less sinister:
- The direct debit arrangement between payee and his bank (collecting
bank or 1. Inkassostelle) stipulates that the payee may only hand in direct
debit transactions if he has sufficient authorization from the payer. The
arrangement also provides for the collecting bank to debit any returned
and disputed transactions to the payee´s account.
- The direct debit agreement (Lastschriftabkommen) between the German
banks stipulates that the payee´s bank has to accept any returned
direct debits. There is a "no questions asked" period of six weeks
from the time of the transaction but if the payer declares that the debit
was made without authorization, the returned item must still be accepted
by the payee´s bank after this period.
- The general business conditions (Allgemeine Geschäftsbedingungen)
between the payer and his bank (paying bank or Zahlstelle) place a general
obligation on the customer to check his statements and report any errors
or inaccuracies to his bank. A special clause for direct debits stipulates
that the maximum period to lodge complaints about direct debits for which
the payee had a mandate is six weeks from the receipt of the "Rechnungsabschluß".
This provides the customer with ample time to lodge any complaints with
his bank and at the same time gives the paying bank a reasonable time-frame
in which to still expect returns.
The system of "Einzugsermächtigung"-Lastschrift is also used
for payments e.g. in WWW shops. The payee can arrange with his bank to initiate
direct debits without written approval by the payer but has to pass stricter
credit checks to be eligible for this exception to the norm.
This page is part of www.payments-in-germany.de and copyright
by Christian Bartsch
Disclaimer: All information on this site is provided "as
is" without any guarantee as to it´s correctness, suitability for
a particular transaction etc. While all reasonable care has been taken to ensure
that the information is correct and up to date, no responsibility will be accepted
for business transactions conducted or losses incurred due to relying solely
on the information contained here. Please check with an independent source wherever
possible.
Apologies for the disclaimer, but the lawyers wouldn´t have it any other
way.