How to Cancel a Direct Debit

Written by darryl james
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How to Cancel a Direct Debit
Inform the bank of your desire to cancel the debit. (gold bank image by John Sfondilias from Fotolia.com)

Direct Debit is a service that consumers use to make regularly scheduled payments to creditors (utility companies, landlords for rent, or banks for mortgages or student loans, for example) directly from their personal checking or savings account to the account of the creditor. Scheduling a direct debit helps consumers avoid missing payments and accumulating late fees and penalties associated with late or missed payments.

The service eliminates the need to write checks for regularly occurring payments. Although account holders can procure the service at no charge, they must monitor the account closely, as insufficient funds can garner late fees with the vendor and declined transaction or overdraft fees with the bank. In order to stop the payment, the account holder must communicate with both the destination and origin account institutions.

Skill level:
Moderately Easy

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Instructions

    Cancel with the company

  1. 1

    Write a letter to the creditor detailing that you no longer wish to have a monthly payment debited directly from your account---even if you will continue a service with that company---paying instead with a paper check or other financial instrument. List your name, address, bank information and account number associated with the vendor in that letter. Some vendors may allow you to cancel online, especially if you initiated the direct debit online.

    How to Cancel a Direct Debit
    Write to the vendor, along with the bank. (Envelope for the letter image by Cosmic from Fotolia.com)
  2. 2

    Write a letter instructing your bank to stop honouring the direct debit from the vendor. List your name, address and account information with the vendor, including the amount of the payment and the regularly scheduled date to specifically identify the payment to stop. Some banking institutions will allow you to cancel a direct debit online.

  3. 3

    Monitor your account beginning one week before the next direct debit is scheduled to hit your account. While most companies will discontinue the scheduled payment once you communicate with them, some will continue to communicate with your bank.

    Additionally, many consumers either forget to cancel a service or assume that cancelling the service also cancels the direct debit. Monitor your account to ensure that you catch any unauthorised payments quickly.

    How to Cancel a Direct Debit
    Monitor your account. (finanzen, zahlen image by Alta.C from Fotolia.com)
  4. 4

    Follow up with the bank and the company. Call the company to verify that it has indeed cancelled the direct debit. Ask the operator for an identification or operator number and name.

    Call your banking institution and verify that it has cancelled the direct debit. If your bank allows additional debits to clear, ask for reimbursement.

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