How to cancel a Direct Debit

Academy · 14 April 2020Revolut Contributor

Automatic payments on your bill are useful... until you don’t need them any more. Knowing how to cancel a direct debit can save you money you didn’t know you were spending. But is cancelling a direct debit possible, and can you learn how to stop a direct debit?

The short answer is yes.

How do you cancel a Direct Debit?

The first step is to work out what payments you are making. Most online accounts have a section telling you which automatic payments are set up. You can also check your account statements, head to a branch, or call up your account provider or bank, to find out.

Direct debits aren’t the only kind of automatic payments, so make sure you know which one’s which. You can check standing orders vs. direct debit here, or read more about direct debit payments here.

The next step is… more checking. Direct debits are set up by the payee company, and they’ll have a signed mandate from you to do this. Therefore it’s best to check with them before you start cancelling direct debits. You may still be within contract, or you may have to give notice to pause or stop.

Even if you’re confident that you’ll cancel a direct debit without breaching your contract, it’s best to notify the company you’re paying. You can do this via a letter or email. You’ll need to include your sort code, account number, and the name on the account. This step shouldn’t be too cumbersome, as you’ll need to share the same information with your bank later on.

The final step is to contact your bank and instruct them to cancel your direct debit. You can do this over the phone, via online banking, or in branch. You should do this at least one day before the payment is due. If you leave it to the last minute, they may not process the cancellation in time, which would mean that the payment would go ahead.

To cancel your direct debit, you need to provide the name of the company, your account number, sort code, and the name on the account. If possible, give your customer reference number with the company, too. The more information you provide, the faster your bank can act.

What happens if you cancel a Direct Debit?

You can cancel a direct debit at any time, and the process is fairly straightforward. Just check whether you’re eligible, and contact both the payee company and your account provider.

If you cancel a direct debit before your contract is up, you will still owe the company money for their services. You will have to check with the company concerned about terminating your contract early, or changing the way you pay. If you don’t, the company is within their rights to recover money from you.

When you’ve advised to cancel a direct debit, the company will be notified. Your account provider will cancel the direct debit immediately and notify the company of this via an ADDACS message. The company will then apply any cancellations within three working days.

If your account provider doesn’t cancel the payment in time, or if the company doesn’t act on the cancellation before your next payment, you may be entitled to make an indemnity claim.

What happens if you cancel a Direct Debit without the approval of the company?

If you’re wondering “Can I just cancel a direct debit?”, don’t go ahead without checking with the payee company first. If you’re certain that you’re within your rights to cancel the direct debit, you can do so without notifying the company – though it’s more risky if you skip this step. For instance, the company may mistakenly charge you for late payment.

When you cancel a direct debit, your bank or account provier will processes the cancellation and contact the company involved. If you cancel a direct debit without the company’s approval, they will find out about your cancellation action via the ADDACS message.

If you are eligible to cancel your direct debit, no money should be taken from your account after you have cancelled. The Direct Debit Guarantee means the company would have to get your authority to reinstate a cancelled direct debit. This scheme also means that if any direct debit payments go ahead after your cancellation, you will be able to secure a refund.

If you aren’t eligible to cancel your direct debit, the company may still be within their rights to recover money from you. This could affect your credit score, and you could risk the company taking further measures to claim back your unpaid fees.

It’s always best to contact the company to whom you’re paying the direct debit before you cancel. At the very least, this will avoid confusion and possible late payment penalties. It’s easy to do, and you could potentially be saving yourself a lot of trouble.

Does cancelling a Direct Debit affect my credit?

If you’re eligible to cancel a direct debit and do so by contacting both the company and your account provider, then cancelling a direct debit will have no effect on your credit score.

It’s important to make sure you're not within contract and if the company you’re paying requires a notice before you cancel your direct debit. If you breach a contract, the company is within their rights to recover money from you. This could affect your credit score or land you in court over unpaid fees.

More questions?

If you have more questions about direct debits, you may want to check out our blog post on What is a direct debit. If you want to learn more about similar topics, check out our articles below:

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