Keeping on top of your finances is incredibly important, especially in modern times. There are so many subscriptions to keep track of these days, it’s hard to identify which services you are still being billed for but no longer use. If you’re trying to figure out how to cancel a Direct Debit, or your responsibilities as a business when Direct Debits are cancelled, then read on and we will inform you on the right processes.

Can you cancel a Direct Debit?

Absolutely. Consumers are entitled to cancel any Direct Debits that they have at any time and without notice. It’s their bank account, after all! When cancelling Direct Debits, it’s good to be sure that the service attached to the direct debit for is not part of a contract of any sort such as a TV or mobile package. Cancelling these Direct Debits can cause serious financial issues and can result in penalties and credit problems.

Although the company gets notified via a bank-issued ADDACS message, it’s best to inform the company of your cancellation before doing so and seek approval. If you cancel the Direct Debit without notifying the company of the cancellation they may mistakenly charge you, or even take action against you if you were not eligible to cancel the Direct Debit.

What happens when you cancel a Direct Debit?

When cancelling a Direct Debit, the company will be informed of the cancellation by an ADDACS message issued by the bank. The company will then have to apply the cancellation within three days of receiving the ADDACS message. During this time, the customer can be contacted about why they have cancelled, how they wish to proceed and the implications that cancelling the Direct Debit may have.

If the Direct Debit is tied to any kind of long term contracts then it’s advisable to set up a new payment plan to ensure that your credit score is not adversely affected and that you avoid any fines or penalties for non-payment.

What happens if you do not act on a Direct Debit request?

If you fail to act on a Direct Debit cancellation request before the next payment date, then your customer may make an indemnity claim against you. This would mean that you have to return the incorrect payment. Any ADDACS messages that you receive should be kept as a record.

How to stop a Direct Debit – your options

Your Options for Cancelling a Direct Debit

1. Can I cancel a Direct Debit through my banking app?

Most online banking apps do come with the ability to cancel Direct Debits. When using your mobile banking app to cancel a Direct Debit, it’s important to check the charges and make sure that they aren’t tied to a contract or something you rely on in your day-to-day.

2. Can I cancel a Direct Debit by phone?

Yes. If you call your bank they will be able to cancel your Direct Debit for you. They may ask how you intend to pay any future recurring charges and whether you want to set up an alternate way to pay. The bank may even ask why you want to cancel to ascertain if you are having any financial difficulty that they may be able to help you with or make arrangements that better suit your financial situation such as lowering the payment amount or changing the payment date.

3. Can I cancel a Direct Debit by letter?

Yes. You can send a letter to your bank to request a Direct Debit cancellation. This is probably the least effective way of cancelling your Direct Debit as it may take some time for the letter to be received and the cancellation to be actioned. By that time, more payments could have been taken, as the bank requires at least one day’s notice before your next payment date.

Get Help With Direct Debit Cancellations

Need help understanding Direct Debits?

If you would like some more information on how to handle Direct Debits then get in touch with our friendly advisorswho can shed some light on the process for you.

Choose FastPay for cost effective Direct Debit solutions.

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