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.