All major banks have moved to seven-day payments and as a result have adjusted the processing of direct debit requests to align to the Responsible lending Code.
Partners Life says this change will impact some customers’ payments, and could inadvertently cause premium payment dishonours.
It says the change means that where a customer may previously have had insufficient funds for a direct debit, the banks may have put a customer account into overdraft to complete the transaction. However, under the Responsible Lending Code this will no longer happen.
Partners Life is asking advisers to let their clients know about the change, and suggests asking the bill payer if their wage payment date is lined up with their direct debit date, or if their insurance premium frequency is lined up with their wage payment frequency. If not, then a change to the direct debit date and/or premium payment frequency is advised.