The Direct Debit Guarantee (or the “Direct Debit Indemnity”) is the Direct Debit scheme’s customer protection. The Guarantee protects customers against payments made in error or fraudulently, making Direct Debit the UK’s safest payment method. The full text of the Direct Debit Guarantee is available below.

This guide describes the protection your customers receive, your obligations under the Direct Debit Guarantee, and how to dispute an invalid refund claim.

The Direct Debit Guarantee rules

Direct Debit Guarantee

The Direct Debit Guarantee protects customers in three ways:

  1. Notifications – customers must be notified in advance of each payment. Failure to follow notification requirements may result in a merchant being barred from the scheme. This is typically 10 working days before a payment is taken but a shorter notice period can be agreed. See our guide to taking payments for more details.
  2. Refunds – customers are entitled to a full and immediate refund of any payment that has been taken in error.
  3. Cancellations – customers can cancel a Direct Debit mandate at any time by contacting their bank. For more information see our guide to cancelling Direct Debit mandates.

Each of the above protections are enforced by the banks and so form an intrinsic part of the Direct Debit scheme. Refunds and cancellations are processed by the payer’s bank without prior discussion with the merchant.