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How to stop a direct debit

how to stop a direct debit

What is a direct debit?

A direct debit is a method of payment where the customer gives authority (in most cases an original signed direct debit form is required) to a Company to take the exact amount of money to pay a bill from a nominated account on the due date without further action being required by the Customer (except to ensure there are sufficient funds available for the transaction).

How is a direct debit different from a direct credit? Top

A direct credit is where you deposit the amount of money to pay your bill directly into the Company’s bank account.

A direct debit is where the Company takes the exact amount of money owing from your nominated account on the due date.

What are the best accounts to set direct debit’s to be paid out of? Top

Everybody has different ways of handling their expenses. Direct debits are typically used when the amounts being deducted from your account can vary month to month, e.g telephone and power. In these cases you want to have them being debited from an account that has some flexibility, such as a cheque account or revolving credit to ensure the amounts being deducted are successful. Some companies even allow their customers to pay their bills by direct debit from their credit cards (check out our directory to see what options are available for the Company you have a direct debit set up with).

Can I choose what day my account is debited? Top

This flexibility will vary from company to company, but it is important to have a date for your account to be debited when there are normally sufficient funds for the direct debit to be successful, this is not available in all cases (check out our easy dd™ directory for individual company details).

Why pay bills by direct debit? Top

Selecting to pay your bills by direct debit ensures that the exact amount you have to pay is paid when it’s due, not earlier or later and without penalty (assuming there are funds to clear the amount). Paying your bill on time ensures that you receive any early payment discounts, and allows you have full use of your money until the Company debits it.

What do I do if I want to pay a bill by direct debit? Top

To start the process you need to complete a direct debit form (check out our direct debit directory for full details). Send it off to the address provided on the directory .

The Company will advise the Bank that you have authorised them to pay your bill by direct debit. Until this process has been confirmed you need to continue to pay your bills the usual way.

When the authorisation has been confirmed the

Company will advise you on their next bill, of the amount and the date of the direct debit deduction.

Will a direct debit work on a weekend/Public Holiday? Top

In most cases, if the day your direct debit is due to be deducted from your bank account/credit card is on a Saturday/Sunday or Public Holiday, the direct debit will be changed to the next business day, e.g due on Sunday will be deducted the following Monday evening.

What do I do if I want to stop a direct debit? Top

You should contact the Company who is due to debit the amount of the bill and advise them of your request and discuss an alternative arrangement. Typically changes within 3 days of the due date may not be able to be actioned in time, so the earlier the notice you can give the Company of your request the better.

The Initiator is the Company who you have given Authority to debit your account.

What is a preferred direct debit initiator? Top

A preferred direct debit Initiator (PDDI) is an Organisation that is trusted by the Banks to deduct direct debits without the need to provide your Bank with a signed direct debit authority form. These Organisations are still required to hold your original authority in the event there is a dispute.

Why doesn’t my easy dd™ alert tell me how much money is going to go out? Top

The easy dd™ alerts are operated independently from the Company who you have the direct debit agreement with. The Company will inform you the amount of a variable direct debit and when it is due at least 10 days before it happens.

Can a direct debit still go out if there isn’t enough money in my account? Top

In some instances a direct debit can be taken if there isn’t enough money in your account. It often depends on the discrepancy between the amount taken and your bank balance. If you notice that a direct debit has taken you over your agreed bank limit contact your bank immediately and discuss your options to have the payment honoured. A fee may apply.

What do I do if I see a direct debit deducted that I don’t recognise? Top

If you see a payment made from your bank account or credit card by direct debit that you do not recognize, contact your bank immediately to facilitate a review of the payment. Your Bank will investigate under which direct debit authority the payment has been deducted. You must notify your bank within 120 days of the payment being made. Alternatively you may wish to discuss the payment directly with the Initiator to clarify exactly what the payment is for and request a copy of the original direct debit authority.

Category: Bank

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