Cancelled direct debit

continualdiamond

I cancelled two direct debits via online banking (natwest) at the weekend as i thought we were going to be short of cash and we don't have an overdraft. The status changed to cancelled, but they have still been taken today.

Thing is, its okay they have been taken as we ended up having enough funds in the bank account for it. Will the bank reverse it and send the direct debits back to the company because i cancelled it or will it just stay as it is?

jambosans

When you cancel a direct debit with the bank you must also inform the company you have done so. If you don't then they can setup another mandate to take payment and this is what may have happened in this instance. There must have been an active direct debit on the account for the payment to leave, and once it is gone I cannot imagine NatWest reversing it. Check your online banking to see if a new DD has appeared.

hieveryone

If you cancel the DD at the bank, a I don' think a company can just set another one up. Whats probably happened is that it has been too late to cancel it in time. I know in my work we apply for the DD a few days before to 'earmark' the money, and as it was over a weekend it has possibly been overlooked?

DCodd

Hieveryone is correct. I bank with natwest and they told me that in order to cancel a D/D, in most cases, you need to cancel it upto 10 days before the due date.

Your D/D has been cancelled but unfortunately for next month.

Extant

jambosans wrote: »

When you cancel a direct debit with the bank you must also inform the company you have done so. If you don't then they can setup another mandate to take payment and this is what may have happened in this instance.

No, they can't - if you cancel a direct debit with your bank, you are canceling the mandate you gave to the company to withdraw the money. An requested (and thus unpaid) direct debit would be returned with the reason "canceled by customer" or "refer to customer" or similar. They will typically know it has been canceled and will then contact you.

They most certainly cannot just set up a new mandate, and even if they could, the timeframes are too tight in this instance.

jambosans

hieveryone wrote: »

If you cancel the DD at the bank, a I don' think a company can just set another one up.

They can, the agreement to pay is with the company, not with the bank. So if you cancel a direct debit with the bank and do not inform the company in some cases (not all mind) the company will setup a new payment.

I've dealt with two other high street banks (not NatWest) that allow you to cancel direct debits right up until the day before, but as I have said, this does not always prevent a payment from leaving. For larger companies their direct debit system may be automated, so it can re-issue a mandate to an account to take what you have agreed to pay on that date.

NatWest may operate differently but you should always inform the company that you have cancelled with the bank.

rb10

I'm sure there was a thread on here recently about this happening with Natwest ... and the conclusion was that when you cancel it online, Natwest put up a message saying that it takes something like three or four working days to cancel it. So if you initiated it at the weekend, you didn't give enough time. It has probably now though been cancelled - so make sure you check for next month.

jambosans

BarclaysManager wrote: »

No, they can't - if you cancel a direct debit with your bank, you are canceling the mandate you gave to the company to withdraw the money. An requested (and thus unpaid) direct debit would be returned with the reason "canceled by customer" or "refer to customer" or similar. They will typically know it has been canceled and will then contact you.

They most certainly cannot just set up a new mandate, and even if they could, the timeframes are too tight in this instance.

They perhaps cannot set up a new mandate straight away but they can request a new mandate setup on an account or contact the customer to notify of failed payment. I have seen this happen with two other high street banks. Some companies use an automated system called AUDDIS, and this allows mandates to be automatically setup on accounts.

Information on AUDDIS.

hieveryone

jambosans wrote: »

They can, the agreement to pay is with the company, not with the bank. So if you cancel a direct debit with the bank and do not inform the company in some cases (not all mind) the company will setup a new payment.

I very much doubt this to be honest, I've worked in a bank and also work in a company taking payments.

This is useful as an example - a customer calls in to my company and states that they cannot make the payment this month/has changed bank/bill is wrong etc. We advise them to cancel DD and they can make a manual payment another way. If my company just randomly set up DD's people would be in upheavel.

From a banking F.A.Q. :

Q. Can money be collected from my/our account after I have cancelled a Direct Debit Instruction?

A. No. The organisation would have to obtain your authority to reinstate a cancelled instruction.

agsnu

jambosans wrote: »

I've dealt with two other high street banks (not NatWest) that allow you to cancel direct debits right up until the day before, but as I have said, this does not always prevent a payment from leaving. For larger companies their direct debit system may be automated, so it can re-issue a mandate to an account to take what you have agreed to pay on that date.

No, it'd take a couple of days for the fact that you had cancelled it to make its way through the system to the company in question, then a couple more days for them to set up a new DD instruction. Although I've heard cases of this happening (and it's rare, because then you could make a claim under the DD guarantee because they don't have the authority to instate a new mandate), it can't have happened here.

To cancel a direct debit, you need to cancel it within the timeframes for your bank - normally before the end of the working day before the money was taken. If you had cancelled the DD before 5pm on Friday, I expect that the money wouldn't have been taken.

sparkey1

Dont know about Natwest, but I once had a direct debit go from RBS to Cahoot. It sent me overdrawn so I spoke to RBS and they cancelled it same day.

However Cahoot by that time had received it, so when RBS cancelled it, it was recalled and arrived back in the account two days later.

As far as Cahoot were concerned, they had received the payment, so no fees or interest to pay. As far as RBS was concerned, they hadn't made it so again no fees or interest. Win win for once!

Not being nosey but who were the direct debits fo? Is there a consequence if they dont receive payment? Late fees prehaps.

Companies cannot just set up another Direct Debit without your consent. However, some companies can set up the direct debit electronically without your signature. Ie Utility companies are often authorised to do this, but you still need to consent each time.