Bacs Chargeback process
The customer claims / payment returns process gives customers protection against unauthorised payments being collected from their account.
Please note: A chargeback / customer claim is also known as an Direct Debit Indemnity Claim in the Bacs scheme.
A claim can be made under the following conditions:
A payment has been taken in error or was not authorised.
How a customer can make a claim:
The customer will need to contact their bank and file an indemnity claim. Usually, the customer will receive the funds back into their account on the same day.
The bank will then notify GoCardless of the chargeback.
Claim time limit:
Within the UK there is currently no time limit for when a customer can request a chargeback.
Guide
The Direct Debit Guarantee
The Direct Debit Guarantee is put in place in the UK to protect customers from payments that are collected in error.
It protects the customer by requiring that the customer is notified in advance of a payment being collected or a subscription being created. In addition to this, it allows a customer to cancel their Direct Debit mandate at any time. Under the Direct Debit guarantee a customer is entitled to a full and immediate refund for any payments collected in error.
All banks and building societies that process Direct Debit payments offer customers protection under the Direct Debit Guarantee.
Can I dispute a chargeback/claim?
If you are using our Pro plan, you'll have access to Protect+, our anti-fraud solution, which can help to challenge chargebacks.
If you’re currently on our Standard or Advanced plan and would like to challenge chargebacks, you'll need to upgrade your plan to gain access to Protect+. More information on Protect+ can be found here.
If you don't have Protect+ there are still some steps you can take:
Direct Debit protection falls heavily in the customer’s favour making it is difficult to dispute wrongful claims once they have occurred.
Many banks will not accept an online mandate as proof that a customer has authorised a Direct Debit. As a result, GoCardless is unable to assist with disputing chargebacks/claims.
If you do receive a chargeback/claim that you do not believe to be legitimate, we recommend the following:
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First, get in touch with your customer to find out why they have charged back the payment. In most cases the customer has not recognised the payment on their bank statement. If necessary, you can also advise your customer that it is a crime to wrongfully charge back a payment. (This is stated in the UK’s 2006 Fraud Act, for example).
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If you are not able to resolve the issue with your customer directly, you would need to seek specialist advice as to if and how you can formally dispute the claim. (If in the UK, for example, disputes should be raised through the Small Claims Court, and the Citizens’ Advice Bureau is the best source of further information on this process).
We recommend that you have a written agreement or contract signed with the customer outside of GoCardless, when they sign up to your services. In the event of a chargeback/claim, this agreement can be used as evidence that a customer has agreed to pay you.
Please note: If you're on our Pro plan, you may have access to GoCardless Protect+, which can help to challenge chargebacks.
You can find more information on Protect+ here.