There are two main sources of protection for customers:
The Swedish Payment Services Act (2010:751)
The Autogiro rules
This guide describes the protection your customers receive, your obligations under the The Swedish Payment Services Act (2010:751) and The Autogiro rules, and how to dispute an invalid refund claim.
The Swedish Payment Services Act (2010:751)
The Swedish Payment Services Act (2010:751) protects customers in two ways:
Refunds - customers are entitled to a full refund of any payment that has been taken in error.
Payment cancellations - customers can cancel an outgoing Autogiro payment at any time by contacting their bank.
Each of the above protections is enforced by the banks and forms an intrinsic part of the Autogiro scheme. Cancellations are processed by the payer's bank without prior discussion with the merchant.
The Autogiro rules are a set of rules put in place by Bankgirot. Every merchant who takes payments using Autogiro is expected to abide by these rules and to uphold the reputation of the scheme.
There are two further protections in addition to the protections given by the Payment Services Act:
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. Notification must typically be given at least 8 working days before a payment is taken, although there are certain exemptions. For more details see our guide on taking Autogiro payments.
Mandate cancellations - customers can cancel a Autogiro mandate at any time by contacting their bank.
The refund request process
Under the Swedish Payment Services Act (2010:751), there are strong rules around refunds. A customer can request a refund for any payment, and provided the bank agrees with the validity of their claim, the customer will receive a refund.
To raise a refund request, a customer must notify their bank. There are two types of refund available:
Refunds for unauthorised payments. A payments is unauthorised if the payer never signed a mandate form or if the mandate was cancelled before the payment was collected. Customers have 13 months from the date of the payment to request a refund for unauthorised payments. A shorter time period applies for business-to-business payments and is agreed with seller's bank.
Refunds for authorised payments. In this case, refunds can be granted if the amount was not explicitly specified when signing the mandate and the amount is more than what the customer could have reasonably expected. Customers have 8 weeks to request a refund for authorised payments. Businesses are not entitled to refunds.
In Sweden there is an investigation process for when refunds are requested. The steps are as follows:
The customer reports the payment to their bank.
The bank submits a refund request to Bankgirot.
Bankgirot contacts your company to request documents showing the payment was correct and authorised.
Your company can either send the proofs back to Bankgirot, or send proof that the request has been resolved with the customer directly.
Bankgirot decide on the outcome of the investigation.
Any refunded payments are reported in your daily reports from Bankgirot (see the Payment specification section in Messages from the Banks).
The amount refunded to the customer is then reclaimed from the merchant automatically.
The Swedish Payment Services Act (2010:751) in practice
In practice, only a low percentage of Autogiro payments are actually refunded. This rate, however, varies significantly depending on business type, as does the severity of the refund.
The risk of a refund request is particularly high for businesses selling:
High value goods such as cars, where the merchant stands to lose a lot from a single fraudulent refund.
Liquid assets such as currency or loans, which could be a target for fraudulent refund requests.
Services likely to see refund requests, such as gambling and payday loan services.
The risk of facing a refund request can be minimized by:
Giving sufficient advance notice - If customers are provided with the required advance notice they'll be able to raise any issues or cancel the payment before it is made.
Providing good customer service - Having clear contact information and an easy-to-reach customer service channel will encourage customers to bring any complaints to you before seeking a refund from their bank.
Promptly processing cancellation requests - Mandate cancellation requests should be processed immediately. This means you can avoid attempting payments on a cancelled mandate.
Following the Autogiro scheme rules - Make sure both you and your provider precisely follow the Autogiro scheme rules - including any updates.
Refunds in action at GoCardless
GoCardless can help you manage refund requests. If a request is made by one of your customers we will notify you immediately. We will then work with you and your customer to understand the reason, and will re-take the payment if appropriate.
GoCardless' processes are designed to minimise the risk of a refund request and to make sure you always abide by The Swedish Payment Services Act (2010:751) and the Autogiro scheme rules.
Clear and compliant payment pages.
Advance notices sent for you automatically. GoCardless will automatically notify your customers by email 8 working days in advance of a payment (optional for Pro customers).
Following the Autogiro scheme rules. GoCardless keeps up to date with all Autogiro scheme rules. We precisely follow the rules and help you do the same.
To find out more about collecting Autogiro payments with GoCardless visit GoCardless.com.