You may have received an email from BACS alerting you to some upcoming changes to the Direct Debit Indemnity Claim Rules from 1st February 2017. You may be wondering what this means for your organisation, so we’ve provided some background and a brief summary of the changes below:
Indemnity Claims are the method by which a payer can claim their payment back under the Direct Debit Guarantee. The bank is obliged to offer an immediate refund in the event that a Direct Debit has been taken in error or without authority. This refund is then claimed back out of the Service User’s (your) bank account.
The Service User can challenge or raise a counter-claim within 14 working days if they can provide evidence that the Direct Debit was legitimately taken within the framework of the BACs Guide and Rules. Up until now this has been impossible if the sign up method was paperless as the Service User would not have a signed mandate as supporting evidence.
Please note: There may be occasions where an Indemnity Claim is being raised and the paying banks will want to contact the service user for further information before proceeding. This is just one of many reasons why it is extremely important to ensure your contact details are kept up to date with the BACs team at your sponsoring bank.
The revised Indemnity Claim Rules allow greater scope for Service Users to challenge or counter-claim indemnity claims. Bacs has added an easy to follow table showing the situations where a DDIC may be received and in each case when a challenge or counter claim can be raised.
A key addition is where the payer is disputing having given authority, previously this could only be challenged if the Service User has a signed mandate as proof of authority being given. This has now been expanded to allow a Counter Claim if there is evidence of a contract either signed by the payer, or where the payer does not dispute the existence of the contract, referring to payment by Direct Debit.
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