14aug responsible advertising hero
13 May 2015

How to cancel a direct debit

What are your rights and who do you tell first?

What are your rights if you want to cancel a direct debit? Who do you tell first?

Don’t let your bank fob you off and tell you it can’t do anything until you advise the company. You’re entitled to cancel the direct debit directly with the bank at any time – as long it's from a bank account. If you have a direct debit from your credit card you'll have to ask the business to cancel it.

Under the Code of Banking Practice the bank must follow your instructions. It will also advise you to contact the business. If the business doesn’t know you’ve cancelled, it’ll still send payment instructions to your bank. If an unauthorised payment is made, complain to your bank.

But remember – if you cancel a direct debit with a business and you’re still using its services, it will still expect payment. Cancelling the direct debit doesn’t cancel your contract with the business – just the method of payment.

Direct debits are different from automatic payments. Direct debits give another party permission to take payments from your bank account. With automatic payments you’ve arranged for a specific amount to be paid from your bank account to someone else’s.

Direct debits are commonly used for variable amounts, like power bills, but can also be for regular fixed amounts, such as insurance payments or rates. If payment varies each month, you’ll usually get at least 10 days’ notice so you can ensure your account has enough to cover it.

Setting up a direct debit usually requires you to sign an authorisation form. Some larger companies are allowed to accept online or phone authorisations – for example, councils, insurance companies and energy companies. Be wary of businesses asking you to sign more than one authorisation form. If you sign more than one, the business can submit a new authority to your bank after you’ve cancelled an existing one.

16jun assert your rights clp need more help promo

Got a problem?

The Consumer Advice Line is available to all our members for support on any consumer-related issue. Our expert advisers can explain your rights and help you resolve problems with a retailer.

Contact us now

Member comments

Get access to comment

Previous member
08 Oct 2015
Paperless DIrect debits

How does this work with paperless direct debits? Does the bank know who then has done paperless direct debits? I tried to cancel a direct debit and was told they can't see it because of it being paperless when i set it up..

Previous member
12 Oct 2015
re: Paperless DIrect debits

Hi Lisa,

Thanks for your question. Cancelling a paperless direct debit is no different. The initiators authority (including name and author number) will be loaded against your bank account so your bank has all the information they need to cancel the direct debit. The bank has put you wrong on this – please feel free to contact our advisers on 0800 266 786 if you'd like any help sorting this out.

Kind regards,

Kate Sluka
Finance Writer