Closing down a Direct Debit payment


#1

Direct Debit, to me, is a dirty word as it takes the management of one’s account out of one’s hands and delegates it to a service company(payee) and bank or credit card company(payer).
I can appreciate that this means of managing one’s accounts can be beneficial for some people, accounts always paid on time and all early discounts credited but it does tend to push accounts into the background so that they are not monitored as they should be. My query is, how does one cancel out of a direct debit arrangement, assuming that there is no dispute with any party?.
Is it sufficient to advise the service company(payee) that one is cancelling the debit debit arrangement, via e-mail, with a copy of the e-mail to the bank or credit card company(payer)?.
If there is a disputed account how does one cancel out of the arrangement?.


#2

kahurangibob you basically have 2 processes and agreements here. One is between the Service Company and Yourself and the other is between your bank and yourself.

The bank has no say around what is in place between yourself and the service company and all of the arrangements you have there.

So whether you have no dispute or there is a dispute, that is between yourself and the service company.

You can instruct the bank to close your direct debit, as the bank is acting on YOUR instructions. If however you are in dispute with the service company, then cancelling your Direct Debit may not be the best option, as that may be outside your Direct Debit Terms and Conditions that you signed up to with the service company.

I hope this has been of help.


#3

Thank you bonzo, for your explanation. The question was a hypothetical one
.
The use of Direct Debit is becoming more common and with some companies it
is the only method they will accept for payment so I was interested as to
how to proceed in the event of a need to cancel.

I am now fairly ancient and can not remember any disputed accounts but we
all make mistakes, on both sides, so the situation could arise and from
your explanation it appears safer not to enter into Direct Debit payments.

Bob Jensen


#4

kahurangibob Not the case. I myself love Direct Debits and are a great instrument for making your life easier and having those payments managed by the Initiator.

If there is any dispute around taking funds and no authority is in place, then the banks follow this up with the bank of the initiator and there are strict terms and conditions that must be followed.

The only difficult are is where there is a dispute between service provider and customer around say those terms and conditions, eg Gym’s with minimum 1 years contract and the customer disputes this and then the service company debits say for the next instalment, that’s where it gets messy, but if the initiator has followed all the Direct Debit rules and conditions, then it is out of the banks control.

Sorry did not want to give the impression Direct Debits are not good, I think they are and serve a good purpose.