Stopping a Direct Debit

DonkeyKong77

Hi

Not sure if this is in the correct thread, sorry if it's not.

Does anyone know if i stop a DD from going through, firstly how easy it is to do? Do i just contact my bank and ask them to stop it?

Also, are there likely to be any penalties - my guess is that it depends on the company but i am not sure.

The company in this case is Student Honours Loans - they have taken over part of the student loans when taken out as a student a few years ago and i am one of the unlucky ones who who have the honour of their customer service.

Their policy is that they can only refund 3 months of payments, if the person isn't eligible for making payments at the time. Its taken more than 9 days for them to send out one of their forms and paymensta usually get taken out on the 20th of the month.

My guess is that the admin process will take it past the 20th for them to start giving the refund and therefore will iclude Octobers payment as one of the "three months", rather than July, Aug and Sept.

If i stop the DD from going through on the 20th, i could avoid them doing this - but i dont want to get charged some sort of penalty if there are any.

Hope this makes sense.

Thanks

MrsMondragon

If you have access to online banking with your bank, just log in and cancel that particular Direct Debit..easy! If not just call into your bank branch and ask them to cancel the Direct Debit for you.

Fullup

To stop a direct debit just send a letter to your bank and give them the details, it is polite to also copy the letter to the payee also.

As far as non payment penalty I think you would need to look at your loan agreement for any details.

HTH.

jimmyjim_uk

Echo the above plus give adequate notice to the bank. Check your T & C's or ring up and ask.

For instance cancelling a direct debit today that is due tomorrow it may still get paid.

I bank with Halifax and they require 4 days notice if cancelling a direct debit, but I do have the option of cancelling by letter, phone, in branch or online

DonkeyKong77

Ta for the advice...

I phoned up Student Loans Company - and they said dont cancel the DD, as the account would go into "arrears" although i shouldn't be paying it back at the mo anyway

Also phoned "student honours loans" (the company SLC sold student loans to) and they said i could cancel the DD, asked whether there would be any penalties they said "no", thought this was a bit strange as i thought the t&c's were the same - didnt get the name of the person who i spoke to (i am always doing that!) but might phone back to confirm this.

dchurch24

A penalty for a breach of contract would be unenforcable in English law anyway, so even if it's in their T&C's you should refuse to pay a penalty and that will be the end of the matter.

Milarky

They [Student Honours Loans] should refund any amount debited in October once they agree to defer, as this is what the agreement will say. You appear to be aware of this but are concerned that by taking October from you and then refunding it, you lose the right to 3 additional months. Again, the agreement ought to cover this - as the number a back months granted will depend on when you applied - some time in the past - for this, and will be unaffected by whether or not a certain payment gets taken by mistake.

Don't cancel the direct debit - only ever notify SHL of new bank accounts details if you want it taken from a different account. Maintaining a 'live' direct debit mandate - even if it never gets used - is also a condition of the agreement. Whilst it is correct to say that fining you where no loss has been incurred is being seen an uneforceable action [credit card co.s beware] this overlooks what the agreement entitles SHL to do where there has been a material breach like non payment. They could suspend the privilege of deferment and you might then have to start paying the loan again. So watch out - and don't, whatever you do cancel that mandate!

[Based on understanding of student loans.]

rio

Agree with the above, but if ever you need to cancel the DD always, always write to both the Bank and the company, unless you have had written notification that no further DD's are to be taken out. Some companies will write to you asking why a DD has been cancelled and may make a charge for the letter. Also if your Bank do pay a cancelled DD in error it helps to have a copy of the letter you have written to the company explaining why the payment is no longer to be taken. The Bank can then make an indemnity claim and refund you immediately. Some people will cancel a DD as a way of forgoing or stalling payment, so you need to cover all your bases. I used to handle DD's as a Bank Clerk, and some people will cancel them every other month and then claim it is the Bank's error!!