Misdirected Direct Deposits (MDD)
Presented by Steve McLaughlin, Director, Payment Products and Services Directorate,
PWGSC
Introduction
Objective
- Share information
- Create a common understanding
- Plan movement towards solutions
DD Success to Date
- During fiscal year 2004-2005
- PWGSC saved $86.2 million in postage
- 43,714 trees were saved
- 2,571 tons of paper
- More efficient process for FI's
- We all have benefited from DD
Challenges
- Costs associated with MDD's are rising
- There is no commonly held definition of what MDDs are
- Processes and controls need to be strengthened
- Some recent examples
Some Facts
- In 1998/1999 there were 1,951 MDD's valued at $638K
- In 2003/2004 the numbers increased to 8,014 transactions valued at $3.7
million
- 310% increase in the numbers of MDD's
- 480% increase in value
Some More Facts
- In 2002/2003 there were 21,506 trace requests
- In 2005/2006, Receiver General is averaging 2,200 per month, forecasting
a volume of 26,400
- Increase of 22.8% in 3 years
- The number of DD transactions will increase 9% during the same period
Risk sharing
- For amounts less than $5K
- FI's pay for first 60% of losses due to MDD
- WGSC/FI's share equally losses above 60%
- MDD's greater than $5K or older than 3 years
- Handled on a case by case basis
Strategy
- Categorize types of misdirected DDs
- Misdirected
- Invalid Program payments
- Fraudulent activity
- Establish criteria to monitor the number and type of MDDs
- Solicit Stakeholder support
- Form a working group
- Develop solutions
- Plan Implementation
- Monitor progress
Next Steps
- Accept that change is required
- Summarize and distribute discussion
- Determine MDD definitions
- Establish a stakeholders working group
- Develop options
- Move forward with a measured approach
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