Direct Debit is a‘pull’ based payment system that enables you to draw funds out of your customers’ bank accounts, following their authorisation of a Direct Debit mandate.
Banks and building societies offer protection to customers making payments by Direct Debit in the event that a payment is collected in error. This protection is provided under the Direct Debit Guarantee.
Through the Direct Debit Guarantee, a customer is afforded the right to chargeback a payment directly with their bank when a payment is collected from their account in "error". This includes any dispute about the amount taken. The customer's bank will then return the funds to them immediately, before notifying and reclaiming the funds from GoCardless.
Chargebacks through GoCardless are rare and in practice only 0.1% of payments are charged back.