Nimbox Vault Logo

What is the Direct Debit Guarantee?

The Direct Debit Guarantee protects you from payments taken in error. In the case of any incorrect or fraudulent payments, you are entitled to a full and immediate refund from your bank.

The Direct Debit Guarantee (or the “Direct Debit Indemnity”) is the Direct Debit scheme’s customer protection. The Guarantee protects our customers against payments made in error or fraudulently, making Direct Debit the UK’s safest payment method. The full text of the Direct Debit Guarantee is available below.

This guide describes the protection that our customers receive, and our obligations under the Direct Debit Guarantee.

The Direct Debit Guarantee rules

The Direct Debit Guarantee protects customers in three ways:

  • Notifications - you must be notified in advance of each payment. Failure to follow notification requirements may result in us being barred from the scheme. This is typically 3 working days before a payment is taken.
  • Refunds - you are entitled to a full and immediate refund of any payment that has been taken in error.
  • Cancellations - you can cancel a Direct Debit mandate at any time by contacting their bank.

Each of the above protections are enforced by the banks and so form an intrinsic part of the Direct Debit scheme. Refunds and cancellations are processed by your bank without prior discussion with us.

The indemnity claim process

Under the Direct Debit Guarantee, the rules around refunds are particularly strong. You can request a refund (known as an "indemnity claim") for any payment, and provided the bank agrees with the validity of your indemnity claim, you will receive an immediate refund. Further, there is no time limit on when indemnity claims can be made.

To raise an indemnity claim, you must notify your bank that you believe there has been an error. This "error" is defined broadly, and includes any dispute about the amount taken.

Your bank will generally accept you at your word, and if they do, they will immediately credit you with a full refund. Your bank will then notify Nimbox of the indemnity claim. The amount refunded to the you will be reclaimed from us automatically 14 working days later.

Questions? Get in touch

To find out more about how we collect Direct Debit payments, get in touch.