The Direct Debit Guarantee

The Direct Debit Guarantee also known as “Direct Debit Indemnity” is the Direct Debit scheme’s consumer protection. The Direct Debit Guarantee protects customers against any payment taken in error or fraudulently.

More about bank charges

The Direct Debit guarantee protects you in 3 ways...

Firstly, you must be given advance notice of any changes to the amount, frequency or date of a payment in advance. You may have agreed a notice period with a creditor so check their terms and conditions before considering a claim. If no other notice period is agreed it will be 10 working days. If you are not given the correct notice of a change in payment details, then you will be entitled to claim a refund.

Secondly, the Direct Debit Guarantee entitles customers to immediate refunds. You can get a full and immediate refund from your bank (also known as an “indemnity claim”) for any payment taken in error.

Finally, you are able to make instant cancellations. Customers are able to cancel a payment at any time before the payment is due to be made. If a payment is taken after it was cancelled you are entitled to an immediate refund.

How to claim a Direct Debit refund

If a DD payment has been taken in error you are entitled to a full and immediate refund from your bank. To claim your refund contact your bank in writing (post email or online chat) or phone them and ask for a refund under the Direct Debit guarantee.

If you have good grounds to ask for a refund and your bank refuse, you should complain to the CEO. You can find their details HERE

What happens after you claim

Once your bank has issued you with a refund, they notify the company of the claim via a DDICA message with a reason code. The amount refunded to the customer will be reclaimed from the company automatically 14 working days later.

If a company believes it has taken payments correctly, they are entitled to appeal the decision. If the company is successful, the bank will claim back the refund from you.

The Direct Debit Guarantee does not impact any contractual agreements between a merchant and their customer.

Fraudulently charging back a Direct Debit payment is a criminal offence under the 2006 Fraud Act.