GoCardless charge-backs and indemnity claims explained

Direct Debit puts the customer in a strong position. Under schemes such as Bacs in the UK and SEPA in Europe, a customer can ask their bank to return a payment, and in many cases the bank does it without asking you. On GoCardless this shows up as a charge-back (the bank side calls it an indemnity claim). It is not a card dispute: in most cases there is no evidence to submit and no decision to wait for.

This guide explains how long customers can claim, how a charge-back moves through GoCardless’s payment events, how it differs from a late failure, what GoCardless lets you challenge, and what to do about the customer. It sticks to GoCardless’s documentation: the payment events reference, the help centre articles Bacs Chargeback process, SEPA Chargeback process and Challenge Chargebacks FAQ, and GoCardless’s guides on the Direct Debit Guarantee and SEPA customer protection (all accessed November 2026). GoCardless’s sites were not reachable from our research environment, so we relied on these pages as indexed by search and on the descriptions in GoCardless’s official API client libraries; check the live pages before quoting a deadline to anyone.

How long customers can claim

The rules come from the schemes, and GoCardless describes them as follows:

Scheme	Customer’s right
Bacs (UK)	Under the Direct Debit Guarantee, GoCardless says there is currently no time limit on indemnity claims.
SEPA Core	A no-questions-asked refund within 8 weeks of the debit. For unauthorised payments, claims up to 13 months.
SEPA B2B	No refund for authorised payments. Claims for unauthorised payments (where the payer shows they never agreed to a B2B mandate) up to 13 months.

GoCardless supports other schemes too (ACH, PAD, BECS, Autogiro, Betalingsservice and others), each with its own rules. Check GoCardless’s help centre for the scheme you collect on.

The practical point: on Bacs especially, a payment you collected long ago is not final. Your records of what the customer agreed to and used should be kept for as long as the customer could claim.

What a charge-back looks like in the API

A charged-back payment ends in the charged_back status, which GoCardless’s API defines as “the payment has been charged back”. The payment events tell the story:

Payment event action	What happened
charged_back	The customer asked their bank to refund the payment under the Direct Debit Guarantee (or the scheme’s equivalent), and it was returned to them.
chargeback_cancelled	The customer’s bank cancelled the charge-back request, which GoCardless says is almost always at the customer’s request.
chargeback_settled	The payment had already been paid out to you, and the amount has now been debited from a payout.

Each event carries details.cause, details.origin and, for bank-originated events, a scheme-specific details.reason_code. GoCardless warns that reason codes are inconsistent between banks, so use them for investigation, not for automation.

Your finance side will see chargeback_settled as a deduction in a payout. Your customer side should react to charged_back, which comes first.

Late failures are not charge-backs

A payment can also fail after it was confirmed. GoCardless’s API notes that payments can fail after being confirmed if the bank sends the failure message late. That is a late failure, not a claim: the money was never really collected. It has its own event, late_failure_settled, when the amount is taken back from a payout.

The difference matters for how you talk to the customer:

• Late failure: a payment problem. Treat it like any failed payment: tell the customer, and collect again if the mandate is still active.
• Charge-back: a customer decision (or a mistake on their side, such as not recognising the debit). Do not collect again before talking to them.

GoCardless’s developer documentation also recommends waiting a minimum of 7 business days after a payment is confirmed before refunding it to a customer, to allow for late failures.

Can you challenge a charge-back?

Usually not. GoCardless’s help centre describes a Challenge Chargebacks feature, part of its Protect+ offering, with conditions: according to the FAQ, on Bacs it is limited to UK customers on the Pro plan, and you have 7 working days to submit evidence. For SEPA Core, GoCardless describes the first 8 weeks as a no-questions-asked refund, so for an authorised payment in that window there is nothing to argue.

Even where a challenge is possible, the customer still has their bank on their side and a relationship with you that a challenge will not improve. Save challenges for clear abuse: a customer who keeps using the service, received what they paid for and claims anyway.

What to do when a charge-back arrives

1. Mark the customer. Record the payment, amount, cause, date and the subscription it belongs to.
2. Hold further collection. Do not let the next scheduled payment go out before you know what happened. Pausing the subscription (GoCardless’s pause action works on subscriptions that run indefinitely or for a fixed count) keeps your options open without cancelling anything.
3. Check the mandate. Look at its status and recent mandate events. A charge-back often comes with, or just before, a cancelled mandate.
4. Write to the customer, without accusing them. “We received a refund request from your bank for your payment of X on date Y. Was this intended?” Offer three ways forward: they meant to cancel (confirm the cancellation), they did not recognise the debit (explain it and offer to continue), or it was a mistake (ask how they want to settle the amount).
5. Collect again only with agreement. If the customer wants to continue or pay what is owed, take a payment on an active mandate after they have agreed to it, or set up a new mandate.
6. Decide on access. Whatever your terms say about unpaid periods, apply them consistently.

Prevent the next one

Most Direct Debit claims are avoidable:

• Make the debit recognisable. Use a payment description and reference that the customer will connect with you on their bank statement.
• Send advance notices that are easy to read. GoCardless’s help centre explains its payer notifications; if you send your own, make the amount and date obvious.
• Remind before annual or price-changed renewals. A large unexpected debit is a classic claim.
• Make cancelling easy. A customer who can cancel in your app has no reason to go to their bank. See how to add a cancel flow to GoCardless subscriptions.
• Refund when you would anyway. A refund you initiate is cleaner than a claim.

Doing this with NoChurn

GoCardless and the banks handle charge-backs; NoChurn does not submit anything for them. Direct Debit claims show up on the customer’s timeline in NoChurn and count in the churn score from 0 to 100, since there is no evidence to send. Where NoChurn helps is before a claim: a cancel flow with a one-click cancel always visible, recovery emails that you review when a mandate is cancelled, and win-back emails at day 30, 60 and 90 based on the cancel reason. See NoChurn + GoCardless.