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The Direct Debit Guarantee: A beginner's guide

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As Global Head of Content Marketing, Chris oversees all of the content requirements for our organic, growth marketing, and demand generation campaigns. This requires a fundamental understanding of the pain points our customers are experiencing and a thorough comprehension of the ways those customers consume and engage with content. A growth marketing expert in the tech space, Chris has worked with complex global businesses such as Google, AWS, Microsoft, SAP, Adobe, Dell and Oracle to grow their most valuable customers, increase revenue and speed up deal cycles. He has also led on customer lifecycle management programs and account-based marketing strategies for BlackRock, EY, Grant Thornton and UBS. ConnectSee full bio

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David and his team manage relationships with banks, scheme providers, and other parties involved in payment transactions in the UK and Scandinavia. David has worked in the finance and payment industry for over 12 years, primarily focusing on the BACs and Faster Payments schemes. He has sat on governance committees and chaired cross-government public sector working groups. David is also a regular attendee at the SIBOS and MoneyLIVE financial conferences. ConnectSee full bio

Last editedApr 20231 min read

A brief explanation of what the Direct Debit Guarantee is and what it means to you.

The Direct Debit Guarantee provides a number of safeguards for customers to protect them from payments being taken incorrectly or fraudulently. (It is also known as the “Direct Debit Indemnity”.) In practice, less than 0.2% of payments are charged back.

We've written about the Direct Debit Guarantee in more detail in our Direct Debit Guide but thought it might be useful to explain very briefly what the guarantee is and what it means to you.

How does the Direct Debit Guarantee protect customers?

In a nutshell, the Guarantee protects customers in three ways:

Advance notice. Customers must be told the amount and date of each payment in advance. To help you check whether you are giving Advance Notice correctly we have put together six quick questions for you.
Immediate refunds. Customers can get a full and immediate refund from their bank (known as an “indemnity claim”) for any payment taken in error.
Instant cancellations. Customers can cancel a Direct Debit at any time through their bank.

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3 useful tips to prevent non-fraudulent indemnity claims

Provide clear contact information and good customer service. This will encourage customers to channel their complaints to you first, before calling up their bank to request a refund.
Send invoices in advance. This gives customers a chance to raise any issues and, if necessary, cancel a payment before it is made.
Follow the Direct Debit scheme rules. Make sure you or your provider precisely follow the rules around mandates and timings.

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Minimise the risk of indemnity claims with GoCardless

Our processes are designed to minimise the risk of our clients receiving an indemnity claim:

Invoices sent in advance for you. We give your customers three days notice of any payments via email.
Provide clear contact information and good customer service. GoCardless offer a first stop for customer support. We help you to manage any indemnity claims from your customers.
Immediately notify you of any claims. We will notify you of any claims immediately and then work with you and your customer to understand the reason and retake the payment if appropriate.
Follow the Direct Debit scheme rules. GoCardless keep up to date with all Direct Debit scheme rules. We precisely follow all the Direct Debit rules and help you to do the same.

To find out more about the Direct Debit Guarantee check out our tips on how you can avoid or dispute indemnity claims.