(Read time <5 mins)

This is why they say, when you cancel a direct debit with a company, to always contact your bank because your bank will act like some sort of robot on autopilot, and let the payments through, even if you cancelled it. And in a time where money is tight for everyone (even companies), they will accept that money, and wait to see if you notice.

So what happens when you notice this mistake

This depends on how soon you notice it and what time your bank closes on a normal working day.

If you notice the mistake within 12 hours of the money leaving your account AND BEFORE your bank closes for the day:

You can call your bank and tell them about the mistake and to “Cancel the Direct debit on their end and return the money”. This is because when a direct debit comes out, the bank takes the money, holds it for some period of time (minimum 1 working day) and then pay that money to the designated company.

So in this timeframe of the first 12 hours from the money coming out of your account (normally comes out at 1am) and up until the bank closes that same day (~5 pm) they can just return that money straight to your bank account (or at least in your account within a few hours). Minimal issues, practically no delays and happy days. And they cancel the direct debit so that doesn’t happen again in future months.

If you notice it beyond this time period:

You’re now in delayed payment territory. You know how long those refunds normally take to your own bank account? Now you have your bank as an additional middle man. It gets a little frustrating especially if you had budgeted money, and have expenses still to come from that account.

What you do is still call up your bank, but this time you Request to file an Indemnity Claim. This is the process to request a paid direct debit refund, under the direct debit guarantee.

If the company knows you were not meant to pay that money (i.e. you cancelled the direct debit on their end, but forgot to tell your bank like me), then within ~14 days you will have your money back. Easy!

If the company disputes that (maybe you hadn’t cancelled it yet on their end), then they have 9 days to give evidence. And then it becomes a bit of a negotiation mess, but a resolution will come. (hopefully it’s in your favour)

Conclusion

The overall take is If you cancel your direct debit with a company, tell your bank IMMEDIATELY. It saves you the accident in the long run or the potential delays.

Thanks for reading and I hope you have a great week.

Speak soon,

Rue

Adulting For Life