Money has been taken from a cancelled direct debit, what can I do?

Sometimes recurring payments can still be taken from your bank account even if you think you've cancelled a direct debit. Read our guide to what you should do.

Terms and conditions

Always check the terms and conditions of any contracts, as sometimes you could be tied in for a fixed period, in addition to having to give notice, before you can leave.

If you decide just to leave, you'll be in breach of contract, and the company in question, such as the gym, will be entitled to pursue you for any unpaid fees.

However, if you make separate arrangements to pay the company what you owe them, it shouldn't be able to remove any direct debits from you.

Complain to the bank

Ask your bank to pay the money immediately back to you as the bank paid the company even though you had cancelled your direct debit.

It's irrelevant whether you owe money to the company. It isn’t for your bank to decide whether or not you owe the money. 

What is relevant is that your bank paid out the sum under a direct debit in which you cancelled.

Top tips

  • Always check the terms and conditions of any contracts, as sometimes you could be tied in for a fixed period, meaning you could be in breach of contract if you decide to leave
  • Under the Direct Debit Guarantee all banks and building societies must refund any disputed amounts without question, pending investigation
  • It's irrelevant whether you owe the money. What's relevant is that the bank paid out the sum under a cancelled direct debit

Direct Debit Guarantee

Under the Direct Debit Guarantee all banks and building societies must refund disputed payments without question, pending further investigation.

The Direct Debit Guarantee applies to all banks and building societies taking part in the direct debit scheme.

The Direct Debit Guarantee doesn't just cover mistakes which are made by your bank. it will also cover mistakes made by the beneficiary.

If you're wrongly informed by your bank that you should pursue the company in question for a full refund, you should remind your bank that in accordance with the Direct Debit Guarantee, it is under an obligation to guarantee a full and immediate refund if the beneficiary makes an error with your direct debit.

If you're given incorrect advice by your bank and this delays matters, then you should make a formal complaint to your bank, seeking compensation for its poor handling of the matter.

If you're not satisfied you can always refer your complaint to the Financial Ombudsman Service (FOS), within six months of receiving the banks’ final response letter. 

Find out how to take your complaint to the Financial Ombudsman Service

Unfair contract terms

The Unfair Terms in Consumer Contracts Regulations 1999 ensure that the standard contract terms used by a company, such as health and fitness club agreements, are fair and clear.

Its purpose is to encourage companies to revise their contracts so that they comply with the Regulations.

The Regulations set a minimum standard not only of fairness, but of transparency which should help you make well-informed and confident decisions about the companies you choose to take contracts out with.

Should the contract you have with a company contain excessive notice periods, or try to tie you in for long periods, or not allow you to cancel/suspend your membership in the event of a serious illness etc, then it could be challenged under these Regulations.

See our guide if you want to cancel your direct debit or standing order

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