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Can a direct debit be cancelled? The simple answer is yes, but if you’re reading this blog post it’s probably because you have a question - ‘how can I cancel a direct debit?’ - and are looking for a little help to do it properly.
Cancelling a direct debit can be quite empowering, especially if you’re not making the most of what you’ve been paying out for. Perhaps you forgot to cancel a subscription after a free trial or would like to slim down your outgoings to reach a financial goal.
If you’re worried about what will happen if you cancel a direct debit without the company’s approval or whether the company can still take your money, you’ve come to the right place. This guide will show you how to cancel direct debit payments, when you can cancel a direct debit, the difference between a standing order and a direct debit and what happens when you cancel a direct debit.
How can I cancel a Direct Debit?
You can cancel a direct debit in several different ways, including writing to your bank, building society or the company the payment goes to, giving them a call, visiting a branch, using online banking or using the banking app.
Some banks or organisations require written confirmation to officially stop a direct debit in addition to you contacting them through one of the above methods. You can do this by sending an email confirming that you would like to cancel your direct debit. The letter should include:
- Your full name
- Details of your intention to cancel
- Date of cancellation
- Your account details with the company
- Contact information in case there are any problems
- Details of your direct debit (Amount, What it’s for)
You should keep your bank and the organisation informed of what you’re doing, and let them know when you’d like the direct debit payments to stop. You should give your bank at least three working days’ notice before the payment is due, so you are not charged again.
When can I stop a Direct Debit?
You can stop a direct debit at any time through your bank or directly with the company you are being charged by. If you’re wondering who can stop a direct debit, it must be the account holder. This is to prevent fraud and protect your identity.
To avoid being charged again, you should check the date on which your direct debit payment usually leaves your account. Make sure you cancel a direct debit well before this date, so you don’t have to pay again. Let the company know you’ve cancelled a direct debit so they can remove you from their system. If you cancel your direct debit outside of normal working hours, at the weekend, or on a bank holiday, it may not be processed until the next working day.
Cancelling a direct debit that you no longer need means you can save money. For example, if you cancel a subscription such as an Xbox Game Pass, you could save that money each month into one of our jars and use it for something you really want.
If I cancel a Direct Debit, can the company still take money?
No, they can’t. It’s your money and your bank account, so you’re entitled to cancel a direct debit. As soon as you tell your bank or the company that you wish to cancel your direct debit, they should immediately take action.
Once you’ve cancelled a direct debit, companies shouldn’t be able to take money from your account. Banks are obliged to action your request, which usually happens with no problems. However, even after the direct debit is cancelled, you may still have to pay if there is a balance remaining.
Contracts
If you have a contract with a company, particularly one that commits you to paying them for a number of months or years, check the terms and conditions before you cancel. You may have to pay the remaining amount even if you cancel direct debits. For example, if you have a PCP agreement for your car, you cannot cancel a direct debit unless you meet the terms of your agreement. This may include returning the car or paying the remaining balance.
Direct Debit Guarantee
If a company does continue to take money from your account after you have cancelled the direct debit, you should be able to get this back through the Direct Debit Guarantee.
When Will the Goods/Service Stop?
If you cancel a direct debit, the service you receive from the company may not always stop immediately. For example, if you cancel your gym membership halfway through a month, you may still have access to the gym until the end of the month as you’ve paid for that month in advance. Other goods or services may stop immediately. If you continue to buy goods or use a service, you must arrange another payment method.
What happens if you cancel a Direct Debit without the approval of the company?
You can cancel direct debits just by informing your bank. However, we recommend that you inform the company too. This gives you peace of mind that you have informed all the parties involved. The company does not need to approve your cancellation unless your direct debit is connected to a contract or outstanding balance. In this case, the company could take action against you if you do not pay.
If you don’t notify the company, there could be a delay in communication between them and your bank, and they could mistakenly charge you. If they do, you should be able to claim this back through the direct debit guarantee.
What is the difference between a direct debit and standing order?
Standing order vs direct debit - is there any difference? They may seem similar as they are both ways to automate payments, but there’s a key difference: control.
With a standing order, you instruct your bank to send a fixed amount to someone else at regular intervals. You control everything - the amount, frequency, and cancellation. It's ideal for predictable payments like gym memberships.
Direct debits give a company permission to take money directly from your account. They control the amount and timing, which can vary for bills like utilities or credit cards. You have some control though - you can cancel the permission and get a refund for errors through the Direct Debit Guarantee.
To cancel a standing order, you can use online banking or an app and it takes just a few seconds to cancel and stop the payment .
Does cancelling a Direct Debit affect my credit score?
Good news - setting up a direct debit and cancelling one will not affect your credit rating if you do it properly. If you are cancelling a direct debit that is not connected to a contract or an outstanding balance, such as a subscription to Netflix or Amazon Prime, this won’t affect your credit rating.
However, if cancelling your direct debit means that you will breach a contract such as a direct debit notice period, this will affect your credit rating. Think carefully before you cancel your direct debit, and check the small print to ensure you will not get into financial difficulty if you cancel.
Once you’ve cancelled your direct debit, you may get a confirmation letter from the company to let you know everything is sorted. You should keep this on file for your records.
A HyperJar card is a great way to manage and pay businesses that accept card payments. Our handy savings jars give your pounds a purpose and help you visualise your savings and spending, all in one place.
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