About the Indemnity
The indemnity is an essential part of the Direct Debit and one of the key aspects that differentiate Direct Debits from other forms of payments. Under the Direct Debit Guarantee, the service user must agree to the indemnity process.
There is no limitation of time a payer can request an Indemnity Claim.
If an error is made in relation to a Direct Debit payment, a payer is entitled to an immediate refund from their bank or building society.
If the payer believes an error has been made, they can request a full and immediate refund from their paying banks. (An indemnity claim can only be raised for the full amount of the original payment, not part of the amount). The bank will be required, under the Guarantee to refund the payer.
Service user error
If the error is due to the service user, the bank will then use the indemnity claim process to receive the refunded payment from the service user.
- the bank can raise the indemnity claim against the service user
- the service user must settle the indemnity claim within 14 working days
- the service user can then consider a counter claim
If the error is due to the bank, the bank may raise a refund request, which the service user can choose to settle.
More about these processes are contained on the following pages.