Direct Debit Guarantee: Cancelling DD but Merchant requires one month notice

principlecounts

It's mid July, I've cancelled a direct debit, so I'm not expecting the merchant to charge me in August. However, in the merchant's terms and conditions they require one month notice, and therefore charging me in August. Does the Direct Debit Guarantee say anything about this situation?

wmb194

principlecounts said:

It's mid July, I've cancelled a direct debit, so I'm not expecting the merchant to charge me in August. However, in the merchant's terms and conditions they require one month notice, and therefore charging me in August. Does the Direct Debit Guarantee say anything about this situation?

No, your contract is with the merchant. Cancelling a DD doesn't cancel the contract.

Brie

Only things I've seen about cancelling a DD is that it needs to be sufficiently in advance of the DD date that the DD isn't already in progress.  Generally about 14-15 days.  So if you DD was to be taken on 31 Aug and you cancelled it today that would be plenty of time.  If you cancelled it today and it's to be taken on 1 Aug that is not plenty of time.

Which merchant is this?  Seems a bit odd to to state 1 month notice.

saajan_12

Cancelling the DD doesn't unilatterally alter the contract, it just stops the act of paying via that method.

So if you cancel the direct debit and payment isn't taken, then its the same as if you were paying manually and failed to pay in August.. ie the merchant would bill you for the outstanding amount andcould sue you for it. The additional costs to recover this amount would also be claimed from you. 

Phoenix72

As stated by wmb164, cancelling the DD does not cancel the contract and you are required to give the contractual notice to the merchant.

These boards are littered with people who think otherwise and end up with a missed payment on their credit file.

eskbanker

principlecounts said:

It's mid July, I've cancelled a direct debit, so I'm not expecting the merchant to charge me in August. However, in the merchant's terms and conditions they require one month notice, and therefore charging me in August. Does the Direct Debit Guarantee say anything about this situation?

The DD guarantee won't help you, but your payments should reflect the actual service provision, i.e. if you're contracted up to mid August then your final payment should be adjusted to align with that, unless it's one of those contracts where you're effectively committed to the end of the calendar month in which the notice period finishes.

born_again

principlecounts said:

It's mid July, I've cancelled a direct debit, so I'm not expecting the merchant to charge me in August. However, in the merchant's terms and conditions they require one month notice, and therefore charging me in August. Does the Direct Debit Guarantee say anything about this situation?

Direct Debit Guarantee

Every organisation using Direct Debit is inspected and vetted by the banks before they’re allowed to collect your money. The banks are responsible for money being refunded if things were to go wrong, so you can bet they’re very thorough.

That said, we know you want to be completely confident that you and your hard-earned money are in safe hands (after all, the cash is being collected from your bank account) and that’s why we have the Direct Debit Guarantee. The Guarantee applies to every single Direct Debit, protecting you just in case someone makes a mistake, like collecting your money on the wrong day or taking the wrong amount.

	What the Guarantee doesn’t do is affect the contract you have with a biller. For example, if you make a monthly payment for a mobile phone, and the biller takes the wrong amount, you can claim that money back but you will still owe the biller for the calls you’ve made and the data you’ve used, or for the amount you agreed to pay.

 

Here’s the formal bit:

The Guarantee

• The Guarantee is offered by all banks and building societies that accept instructions to pay Direct Debits

• If there are any changes to the amount, date or frequency of your Direct Debit the organisation will notify you (normally 10 working days) in advance of your account being debited or as otherwise agreed. If you request the organisation to collect a payment, confirmation of the amount and date will be given to you at the time of the request

• If an error is made in the payment of your Direct Debit, by the organisation or your bank or building society, you are entitled to a full and immediate refund of the amount paid from your bank or building society

• • If you receive a refund you are not entitled to, you must pay it back when the organisation asks you to

• You can cancel a Direct Debit at any time by simply contacting your bank or building society. Written confirmation may be required. Please also notify the organisation.

https://www.directdebit.co.uk/direct-debit-guarantee/

principlecounts

Thanks for everyone's advice, the general consensus is the direct debit guarantee doesn't impact the contract.