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Direct Debit Disputes

Direct Debit disputed payments are a little different to a regular chargeback. The main difference is that they can not be challenged by the merchant and therefore, the dispute has to be accepted without further inquiry.

There can be several reasons why a customer disputes a transaction:

  • The customer does not recognize the transaction on their bank statement or the transaction was fraudulent and the cardholder was not aware their credit/debit card was being used for this purchase.
  • The service was not provided and a full refund was expected to be made to the cardholder. The cardholder may have cancelled this and did not follow your T&Cs or maybe the refund was not issued.
  • The service was not as expected/described in the description and a partial refund was expected to the cardholder.

Please contact the customer immediately to clarify the reason for the chargeback. It is quite possible this could be a misunderstanding and can be resolved by contacting the customer directly. 

In life cycle of a Direct Debit disputes looks a bit different:

Disputed within 8 Weeks: Customers are able to dispute a SEPA Direct Debit transaction on a “no questions asked” basis, meaning the funds will automatically be returned to them.

Between 8 weeks and 13 months: Customers are still able to dispute transactions during that period. The arbitration process involves both the acquiring bank and the customer. 

After 13 months: Disputes are no longer possible.

Updated on February 17, 2021

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