Indemnity Claims: Process
- The payer contacts their bank and asks for a full and immediate refund
- The bank considers the request and if the indemnity fulfills one of the criteria for a valid claim, they will refund directly to the payer.
- The bank will then raise an indemnity against the service user.
- The service user can choose to challenge the indemnity or the amount will be debited after 14 working days
- The service user then has a further 14 working days to raise a counter claim
- the paying bank will consider any counter claim and act within 90 days to settle or dismiss.
The service user must not settle an indemnity claim by remitting directly to the payer.
This is because the paying bank will settle an indemnity with the payer and the service user will still be liable to pay the paying bank – thereby paying twice.
Indemnity Claims: Timescales
Indemnity claims must be settled by the service user to the bank within 14 working days. Under the automated service, the service user doesn’t have to undertake an action as their account will automatically be debited the amount of the indemnity claim. The service user must then consider whether to raise a counter claim (see next pages).
Indemnity Claim: Process Diagram
A diagram of this process is below
Note: This is the process for almost all Indemnity claims. There are however 3 exceptions where a paper indemnity form must be used rather than an automated transfer of information. These are:
- Where the amount claimed is greater than £100,000
- Where the SUN is no longer recorded on the Bacs system
- Where a claim is being made for consequential loss (due to the need for supporting information / justification). Note: banks are not required under the scheme to make payments for consequential loss before receiving funds from the service user