A BACS Direct Debit Indemnity Claim (DDIC) is a mechanism under the UK Direct Debit Guarantee that allows a customer's bank to immediately refund them for an erroneous, unauthorized, or non-compliant Direct Debit payment, and then automatically recover that money from the collecting business (the Service User).

Note: This feature is in beta, talk to your Pismo representative before using this in production.

Key protections and features

• The Direct Debit Guarantee—Backed by UK banks and building societies, this rule gives customers the right to an immediate, full refund from their bank if an error or unauthorized payment occurs.
• Common Uses—Utility bills, mortgages, gym memberships, software subscriptions, insurance premiums, and charitable donations.
• Comparison—Unlike faster UK payment rails (like Faster Payments) which settle near-real-time, BACS Direct Debit is a "pull" payment designed for predictable, automated, bulk-processed collections.

End-to-end claim lifecycle

The process is asynchronous. Clients should treat the initial submission response as confirmation that the instruction has been received or submitted, not as confirmation that funds have been recovered.

1. Identify the claim—The client identifies an issue after settlement, associates it with the original Direct Debit and determines the claim amount and BACS reason code.

2. Submit the instruction to Pismo—The client sends the claim instruction. Pismo validates the request at platform level, links it to the original payment and creates a claim record .

3. Initiate lifecycle tracking—Pismo assigns internal identifiers and initializes an asynchronous state machine so that submission, acknowledgement, outcome and ledger activity remain traceable.

4. Submit provider claim through Form3—Pismo transforms the claim into the provider integration format and submits it to Form3. Form3 performs technical validation and forwards the claim to BACS.

5. Route for external review—BACS routes the claim to the receiving bank. The receiving bank reviews the claim under the applicable scheme process.

6. Receive the outcome —The response returns through Receiving Bank → BACS → Form3 → Pismo. The result is accepted or rejected and may include scheme or rejection references.

7. Resolve the claim —Pismo updates the claim state . If acceptance and fund flow-back are confirmed, the corresponding ledger impact is applied. Pismo then makes the final outcome available to the client.

8. Complete client operations—The client reconciles the result, communicates with the customer, and closes or escalates its operational case.

Claim initiation requirements

A claim request should contain enough information to identify the client, the original settled transaction, the intended recovery and the reason for the claim. Exact field names will be defined in the API reference.

Client responsibility

The client remains responsible for deciding whether to raise the claim and for selecting the appropriate reason and amount. Pismo and Form3 provide technical processing rather than customer-claim adjudication. Form3 is an example of a provider.

Endpoints

Pismo provides the following endpoints for BACS DDIC claims:

1. Raise a Direct Debit indemnity claim — Create a BACS Direct Debit Indemnity Claim (DDIC). Generates a BACS Direct Debit indemnity claim status changed event.
2. List BACS Direct Debit indemnity claims —List DDIC claims for an account
3. Reverse BACS Direct Debit indemnity claim —Reverse a previously raised BACS Direct Debit indemnity claim. Generates a BACS Direct Debit indemnity claim reversal status changed event.

Events

Processing for BACS DDIC claims generates the following events:

1. BACS Direct Debit indemnity claim status changed — DDIC claim status has changed. Transitionting to one of the following statuses generates this - CREATED, PROCESSING, CONFIRMEDand FAILED.
2. BACS Direct Debit indemnity claim reversal status changed — DDIC claim reversal status has changed. Transitionting to one of the following statuses generates this - CREATED, PROCESSING, CONFIRMEDand FAILED.