Golf clubs can now collect membership fees via direct debit AND be FCA compliant

Seamus Rotherick
By Seamus Rotherick July 13, 2020 12:17

A new and automated online system has been launched that allows golf clubs to collect annual membership fees using direct debit while ensuring the club is FCA compliant.

Many golf clubs would struggle to survive without offering their members the option to pay their annual membership in instalments.

But these in-house schemes may be subject to the Consumer Credit Act 1974 (CCA), which would entail additional regulation of clubs by the Financial Conduct Authority (FCA).

Now, there is another way.

GolfClubSubs has commissioned advice from leading law firm Morton Fraser to create a paperless, automated, online system that has all the benefits of an in-house direct debit scheme without the burden of costly administration, while ensuring the club is compliant with current FCA regulations.

“Many club managers are working harder than ever to stay on top of member payments, database administration and reporting, especially now given the reduction in club budgets due to the pandemic,” says Daniel Halliday, founder and CEO of GolfClubSubs.

He continues: “The GolfClubSubs system enables clubs to run a fully FCA compliant direct debit scheme without the administrative overhead of manually uploading files or phoning late payers. It basically runs itself, allowing the club manager and accounts team to focus on higher value tasks.”

The risks of introducing a credit provider

For many clubs, additional financial and administrative costs are unthinkable. Yet, if golfers cannot avail themselves of a flexible payment facility, their membership may be lost to the club.

Naturally, this scenario puts club management in a bind. And, in many instances, they have turned to credit providers but clubs should beware: introducing members to such providers is credit broking and as such is regulated by the FCA. Clubs opting to go down this avenue remain subject to the regulations they were seeking to avoid in the first place. What appears an attractive option can actually leave a club more exposed to FCA compliance issues.

John Lunn, banking and finance partner with the highly regarded law firm Morton Fraser, provides clarity on the matter: “Some clubs have opted to introduce members to credit providers rather than collecting monthly payments themselves. This gives the club the benefit of an upfront payment of the annual subscription with the member repaying the credit provider by monthly instalments, including interest and charges.

“For the avoidance of doubt, this will not mean that clubs are free of FCA regulation.”

John Lunn adds further clarity to the position of clubs: “Introducing members to credit providers is ‘credit broking’. This is a regulated activity which requires the club to be FCA regulated with credit broking permissions.”

Meeting FCA regulations is not the only additional concern for clubs

An arrangement with a credit provider can also expose a club to hidden risks. If a member defaults on a payment plan, which is effectively a loan from the credit provider, then the club may be liable to repay the outstanding balance to the credit provider.

In the past, clubs have fallen victim to such defaults, incurring unforeseen liabilities. Alternatively, the member may be held liable to pay even if their circumstances have changed due to ill health for instance and they are no longer able to play golf at the club.

A smart solution

Too many golf clubs find themselves facing an unnecessary dilemma when it comes to collecting annual subscriptions and remaining FCA compliant. A smart software solution, developed by GolfClubSubs and already adopted in clubs across the UK and Ireland, removes this administrative burden. Overnight, your club can reduce its workload and lower costs.

Rhys Morgan, general manager at Pennard Golf Club near Swansea, says: “Pennard switched to GolfClubSubs to manage our members’ direct debit payments. The set-up process was simple and well managed. We are extremely pleased with how effective the system is.”

No more charges for failed payments

GolfClubSubs has created the first fully automated direct debit system, removing a costly and time consuming layer of the sub collection process. Members can enrol from home on their PC or mobile phone and the club collects payment without the need for any manual input. So, no need to process cheques or lodge cash at the bank. Better still, no charges to the club for a failed payment.

Other features

  • Automatic payment reconciliation and reporting
  • Automatic retry of failed payments and communication to member to top up their bank account if required
  • Automatic text and email notifications.

How to structure direct debit schemes

Clubs can help to avoid CCA and FCA regulation by adopting the criteria set out below:

  • No membership rights granted before payment is received
  • Each instalment must be a prepayment for the following month’s playing rights – on a rolling ‘pay-as-you-go’ basis
  • Inform members that they lose the right to play if they stop paying
  • Create point of difference between monthly and full payers – seats on committee only available to full payers, for example
  • No separate admin fee.

GolfClubSubs has embedded this process together with a specific wording of terms provided by John Lunn into their automated direct debit system. This allows clubs the peace of mind that they can collect their monthly subscriptions while being on the right side of current regulations.

For further details and to take a look at the system please visit the GolfClubSubs website at: or contact Daniel Halliday by email:

(Clubs should seek their own specific compliance advice on their own direct debit systems if in any doubt.)


Seamus Rotherick
By Seamus Rotherick July 13, 2020 12:17
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