Abacus, the industry body for the Australian mutual financial services sector, has advised us that after a period of communications with Commonwealth Treasury and ASIC it has now been informed that:

• It was not the Government’s intention that the direct debit notice provisions of the NCC would apply where the debtor has authorised another financial institution to send payments to the credit provider. It was only intended that they would apply where the debtor has authorised the credit provider to access their payments from an account with another financial institution.
• The provisions were not intended to apply to payments sourced from another account the debtor holds with the credit provider (eg by periodic payment authority). Only payments processed through BECS are potentially caught.
• ASIC proposes to administer the provisions consistently with what the Government intended, and ASIC may issue an information sheet on this topic in due course.

Abacus has now issued a Compliance Note to its members on this topic.