Modulr Direct Debit collection service
Direct Debit collection service
1.1 The terms of this Schedule 2 shall apply where Direct Debit Collections are included within the Modulr Products as set out in the Introduced Client Application Form
2. Direct Debit collection service
2.1 The Direct Debit service allows the Introduced Client to set up a direct debit to collect funds from a bank account of an individual or business (the “Direct Debit Customer”) that uses the Introduced Client’s services to be paid into an account in the name of Modulr for the specific purpose of collection (the “Collection Account”) (the “Direct Debit Collection Service”). The terms and conditions of service, which are set out below apply.
2.2 The Collateral Account shall hold the Collateral Account Amount and the Collateral Account Amount may only be applied by Modulr in accordance with the terms of this Schedule 2.
3.1 In this Schedule the following expressions shall bear the following meanings:-
— 3.1.1 Accounting Month shall be calculated by reference to the first day to the last day of each calendar month.
— 3.1.2 BACS means Bankers Automated Clearing System.
— 3.1.3 Collateral Account means an account held by Modulr in the name of Modulr for holding the Collateral Account Amount as notified to Partner Platform from time to time.
— 3.1.4 Collateral Account Amount means the amount required to be held in the Collateral Account being the amount specified by Modulr and notified to [Partner Platform / Introduced Client] from time to time, which from the date of the Agreement until otherwise amended in accordance with this Schedule 2, shall be an amount equal to the Minimum Monthly Fee on a monthly basis.
— 3.1.5 Collection Account as defined above.
— 3.1.6 Collection Request shall mean a request made by the Introduced Client, in the agreed format, to Modulr to effect the collection of any number of individual monetary sums due in any Accounting Month. A Collection Request may effect either single or multiple collections.
— 3.1.7 Direct Debit Indemnity Claim has the meaning given to it in the Direct Debit scheme rules.
— 3.1.8 Direct Debit Scheme means the service provided by Modulr whereby payment by the Customer for services provided by the Introduced Client are collected by means of a Direct Debit facility operated and managed by Modulr.
— 3.1.9 Electronic Customer Application Form means a form required by BACS to set up a paperless direct debit containing Customer data including the Customer’s name, address, bank account and sort code.
— 3.1.10 Failure(s) means any act of default by the Customer in making any payment due directly to Modulr or any other third party, agent or intermediary or failure by the Customer to adequately and timeously complete an Electronic Customer Application Form incorporating an instruction to its bank or building society to pay direct debits or the Customer becoming bankrupt or insolvent as prescribed by the Insolvency Act 1986 or compounding with its creditors or passing a resolution or having proceedings commenced against it for its administration or liquidation or the appointment of a receiver manager administrator or administrative receiver in respect of all or any part of the Customer's assets or undertaking, or withdrawal of the Customer’s consent to the collection of direct debit transactions.
— 3.1.11 Indemnity Claim(s) means a claim for reimbursement made in accordance with the BACS rules and submitted by the Customer to the Customer’s bank.
— 3.1.12 Invoice Balance means the credit incurred by the Customer.
— 3.1.13 Service User Number or SUN means the user number allocated to the Introduced Client under which the Introduced Client can submit Collection Requests and direct debit collections will be processed.
— 3.1.14 Terms means these terms between Modulr and the Introduced Client.
4. Obligations of Modulr
4.1 On receipt of an Electronic Customer Application Form Modulr will set up a Customer wishing to use the Direct Debit Scheme. Modulr will apply for payment of the Invoice Balance on receipt of a Collection Request submitted by the Introduced Client. Subject to clauses 4.2, and 4.3., Modulr will submit all Collection Requests and Electronic Customer Application Forms received prior to 23.59 on a Business Day to BACS no later than the next Business Day.
4.2 Modulr may refuse to process a Collection Request or Electronic Customer Application Form if it suspects there has been unauthorised or fraudulent use of this direct debit service. In such instance, Modulr shall give written notice to the Introduced Client setting out the reasons for the refusal either before the scheduled submission time or, if it is unable to do so, immediately afterwards, unless providing such notification would compromise reasonable security measures or is unlawful.
4.3 Modulr shall notify the Introduced Client at the earliest opportunity of any other refusal to initiate or execute a Collection Request and shall include the reasons for the refusal and the procedure for rectifying any factual errors that led to the refusal in such notice, provided that such notification is not unlawful.
4.4 Modulr shall monitor the receipt of payments received from a Customer and notify the Introduced Client of any payments that are not made when due.
4.5 In the event of Modulr becoming aware of a Failure, Modulr shall notify the Introduced Client. Modulr shall use all reasonable endeavours to provide success and failure information on the Business Day after the collection date, and will provide any additional information on the following Business Day. Modulr will notify Indemnity Claims received prior to 23.59 on a Business Day no later than the next Business Day.
5. Obligations of the introduced client
5.1 The Introduced Client shall send to Modulr an Electronic Customer Application Form as specified by Modulr from time to time in order to set up collections from the Customer.
5.2 The Introduced Client shall use its Service User Number in Collection Requests in order for transactions to be executed.
5.3 The Introduced Client shall submit Collection Requests via the interface provided by Modulr prior to 23.59 on a Business Day not less than two (2) Business Days prior to the collection date. By submitting the Collection Request via the interface, it is deemed to be authorised by the Introduced Client. Once the Collection Request is submitted, it cannot be revoked.
5.4 The Introduced Client warrants that any sum submitted to Modulr for collection from the Customer is due and owing by the Customer to the Introduced Client and that any invoice issued will be made available to Modulr if requested.
5.5 The Customer must not include any sums disputed at any time between the Customer and the Introduced Client as a sum to be collected by Modulr until such dispute is resolved to the Customer’s satisfaction.
5.6 Where Modulr is advised of any Failures or is required to repay any sum or sums to the Customer under its BACS obligations, these Failures and Indemnity Claims will fall immediately due for reimbursement from the Introduced Client to Modulr and the Introduced Client indemnifies Modulr in respect of any such sums. Modulr reserves the right to deduct any such sums from future payments made to the Introduced Client under clause 4.1 of these Terms.
5.7 If requested, the Introduced Client will forward copies of all invoices due between the Customer and the Introduced Client to Modulr.
5.8 The Introduced Client shall ensure that its terms and conditions of trading in connection with providing or distributing services to the Customer shall not in any way conflict with or prejudice the timing and methods of Modulr collecting payments from the Customer in accordance with these Terms or any of the other provisions of these Terms and in the event and to the extent that such conflict or prejudice exists the Introduced Client shall forthwith rectify and remedy the conflict or prejudice by amending the said terms and conditions and shall be responsible for all losses, damages, claims, demands proceedings liabilities and costs that are directly incurred by Modulr as a result of the existence of any such conflict or prejudice.
5.9 The Introduced Client shall notify Modulr without undue delay on becoming aware of the loss, theft, misappropriation or unauthorised use of the credentials used by it to access the Modulr services for the purposes of initiating Collection Requests.
5.10 The Introduced Client shall notify Modulr without undue delay upon becoming aware of any transaction which has been incorrectly processed or settled by Modulr.
5.11 Notwithstanding the termination of these Terms for any reason the terms set out in clause 5.8 shall continue to apply in respect of any amounts which Modulr may be obliged to repay in respect of any Failures or under its BACS obligations and whether during the subsistence of these Terms or after its termination.
5.12 The Introduced Client will use the Direct Debit Scheme only for its own, internal business purposes, and will not resell them or otherwise make them available to any third party. The Introduced Client will not permit any third party to access the Direct Debit Scheme, except its accountants or such other third-party access is expressly agreed to in writing by Modulr.
5.13 The Introduced Client will be responsible for handling all Direct Debit Customer disputes or requests for refunds with respect to the Direct Debit Collection service from Customers in accordance with the Complaint Handling Policy. Where the Customer is determined to be due a refund in accordance with the Complaint Handling Policy, Introduced Client will refund the Customer directly.
5.14 If a Customer or the Introduced Client on behalf of the Customer, raises a Direct Debit Indemnity Claim which is subsequently approved by the Direct Debit scheme, Modulr will send to an account as directed by the Introduced Client any funds that it receives from the Direct Debit scheme as a result of such Direct Debit Indemnity Claim.
6. Collateral account
6.1 [Partner Platform shall prior to the Go Live Date pay the Collateral Account Amount into the Collateral Account. Without prejudice to any other rights of Modulr under this Agreement, Modulr shall be under no obligation to provide the Direct Debit Collection Service unless and until the Collateral Account Amount is received in cleared funds into the Collateral Account.
6.2 Partner Platform shall ensure that from the Go Live Date until this Agreement is terminated, the Collateral Account Amount is maintained in the Collateral Account at all times and in accordance with the terms set out in this Schedule 2 by making further payments into the Collateral Account.
6.3 Partner Platform agrees that Modulr may at any time immediately and without notice, apply any sums held in the Collateral Account in satisfaction of all or any of liabilities or fees payable or incurred by Modulr as a result of providing the Direct Debit Collection Service to Partner Platform including but not limited to any deficit in a Customer’s Account or any Partner Platform Account as a result of the payment of a Direct Debit from such Accounts or any liability arising under clause 6.4 of this Schedule 2.
6.4 Partner Platform shall indemnify Modulr for any loss or damage or liability Modulr incurs under this Schedule 2 as a result of Modulr being unable to otherwise apply funds in the Collateral Account due to insufficient funds.
6.5 Upon Modulr exercising its rights under clause 6.3 of this Schedule 2, Partner Platform shall within 5 Business Days pay an amount into the Collateral Account in order to ensure the Collateral Account Amount is maintained.
6.6 Modulr will review the Collateral Account Amount from time to time and, if the Collateral Account Amount is revised, Modulr will notify the Partner Platform of the revised Collateral Account Amount and the amount (if any) to be paid by Partner Platform in order to ensure that the revised Collateral Account Amount is maintained in the Collateral Account. The Partner Platform shall pay the said amount into the Collateral Account within 5 Business Days of Modulr’s notice. Where Modulr’s review results in a decrease in Collateral Account Amount from the amount then held as such in the Collateral Account, Modulr shall pay to the Partner Platform the amount of the surplus.
6.7 Any failure to make a payment and/or to maintain the Collateral Account Amount by the Partner Platform in accordance with this clause 6 of this Schedule 2 shall be deemed a material breach of the Agreement and in case of such breach Modulr can (notwithstanding any other rights Modulr may have as a result of Partner Platform’s breach) immediately and without notice suspend or withdraw the Direct Debit Collection service in whole or in part.
6.8 Upon termination of this Agreement or the Direct Debit Collection service, Modulr shall return the amounts in the Collateral Account to Partner Platform within 30 days, notwithstanding that Modulr shall be entitled to deduct any amounts to satisfy in full any liabilities of Modulr relating to providing the Direct Debit Collection service. In the event Modulr’s liabilities are greater than the amount in the Collateral Account, Partner Platform shall pay such amount to Modulr on Modulr’s demand.]
7.1 In addition and without prejudice to the termination rights of Modulr in the Agreement, Modulr may terminate or suspend the Direct Debit Collection Service in whole or in part immediately by giving written notice to the Introduced Client if:
— 7.1.1 indemnity claims exceed the 3% threshold for more than one month in any period; and/or
— 7.1.2 Introduced Client fails to discharge its obligations under this Schedule.