Customer protections are in place to allow your customers to cancel a mandate or to receive refunds for unexpected or erroneous payments.
\n\nCustomers are entitled to contact their bank and cancel their mandate. Once the customer’s bank receives a request for a mandate cancellation, they must stop taking further payments from the customer’s account no later than three working days after the request was received. Any payments already taken that month will not be returned to the customer’s account in this instance.
\nThe merchant can cancel a mandate through the 0605 file sent to Nets. This would need to be sent three banking days before the next payment date to ensure no future payments are taken.
\nA mandate will automatically expire if no payments are taken for 15 consecutive months. Mandates which expire cannot be reinstated, instead a new agreement must be created.
\nA customer can cancel a debtor agreement with their bank at any time. Any mandates linked to this account would automatically be cancelled and within three banking days, and any future payments linked to these mandates would cease.
\nIn Denmark, a customer has until the seventh calendar day of the month in which payment is due to reject or reverse a single payment (that is going to be collected that month.). If the 7th falls on a weekend or a public holiday, the customer will be given an additional banking day by which to initiate the rejection or reversal.
\nIf the payment has already been taken by the time the rejection or reversal is initiated, the funds will automatically be extracted from the merchant’s account and returned to the customer (i.e. reversal). If the payment has not occurred yet, it will be cancelled before any funds move between accounts (i.e. rejection).
\nThe customer can initiate this rejection or reversal in a number of ways:
\nThrough the digital channels mentioned above, the customer will see an option to ‘reverse or reject’ the payment which will disappear after the seven day window.
\nThe customer may only reject or reverse the full amount of a single payment and the cancellation of a single payment will not affect any future payments. The customer will notice the refunded amount as credit in the following month’s payment summary, however it may be shown against the original charge date.
\nA merchant cannot directly dispute a rejection or reversal initiated in this way by the seventh calendar day of the month. Any funds that need to be refunded are processed automatically by Nets who will send a request to the merchant’s bank, and the merchant will be notified of the rejection/reversal via the 0602 file from Nets. However, if the customer has unfairly rejected or reversed the payment, the merchant can re-charge the customer in the following month. If the customer rejects or reverses this second attempt then the merchant must ask the customer to pay via an alternative method (e.g. via an invoice).
\nIf a customer wishes to initiate a reversal or rejection after the seven day window, it becomes known as a customer claim.
\nThe customer’s bank may reverse a payment up to two working days after the due date. This could be for a number of reasons:
\nIn this instance, the bank will send the reversal request to Nets, who will facilitate the transfer of funds from the merchant’s account to the customer’s account.
\nPlease note: If a payment fails due to insufficient funds but the value of the payment is below 1000 DKK, the bank will absorb the cost and the merchant would not be required to return the funds.
\nIf a customer wishes to request a refund outside of the seventh calendar day window, this is known as a customer claim. They can only submit this claim to their bank up until 13 months after the payment date.
\nA valid claim is sent from the customer’s bank to the merchant’s bank when:
\nA valid claim can also include any claim where:
\nThe procedure for these claims varies between banks so it is best to ask your bank how it is managed in specific cases. Nets are not involved with any refund requests which arrive after the seventh calendar day deadline (i.e. claims).
\nIn case of a valid claim, the merchant may also be liable to cover the customer’s loss of interest on the funds in question.
\nIf a merchant wishes to dispute a claim within the 13 month window, they can do so through their bank. They will be asked to provide evidence of the legitimacy of the mandate and payment in question.
\nTo reduce the risk of customers seeking a claim you can:
\nIf one of your customers initiates a claim, GoCardless will notify you immediately and work with both you, and your customer to manage the process. GoCardless aims to minimise the risk of a customer claim and ensure the Direct Debit scheme rules are satisfied.
\nThese rules include:
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