How to cancel direct debits
Beware cash leaking from your bank account
It's a shocking but typical example: "I've paid £16/month for white goods I no longer have for six YEARS." That's not far off £200 for nothing, every year. Many waste £1,000s paying for products and services they don't need or never use. So whether it's mags, gyms, dating sites or paid TV, get tough and cut 'em down.
Join the Cancellation Heroes: have your own rigorous super-audit to banish these bank balance drains for good.
In this guide
Join the Cancellation Heroes
Many of us have costly subscriptions on gyms, mags, dating sites, packaged bank accounts and more, yet rarely or never use them – or with time and house moves, forget about 'em altogether. It's likely hundreds of millions are wasted this way.
Here's a painful example from Martin's Radio 2 phone-in with Jeremy Vine:
I looked through my standing orders for the first time in ages. I've been paying repair insurance for two white goods we no longer have for six years, at £16 a month.
Over six years, that's £1,200 down the pan – think what you could do with that! So whether it's the weekly mag you pay for but rarely read, or the unused gym membership you're guiltily hoarding, take action now...
Being a Cancellation Hero is simple: unearth EVERY wasted regular payment and stop any you no longer need or use.
Flush 'em out and you'll soon have more cash in your pocket (no cape or tights required). All you need are your bank and credit card statements and a little know-how.
Tales of cash flushed down the drain
Moved 2 years ago, but was still paying a direct debit to my old gym (£330 per year) and to what was my local wildlife centre (£43 per year) – both of which are now too far to visit (and I never went to the gym anyway!). Also cancelled a phone insurance plan for £10 a month, as the phone is now so old it isn't worth the insurance Total saving for this year over £500!
Trawling through my bank statement, I had been paying for mobile phone insurance I wasn't using since 2009!!
Cancelled the direct debit and was informed the refund for £856 would be with me within 7 days! Kerching!
Just claimed back £650 in incorrectly charged (I switched and they kept taking) electricity... Sad thing is I didn't do it sooner.
I had appliance cover... when I read this article and checked the policy I realised most of my appliances would not be covered. I have now cancelled £22 per month. Thank you MSE – you have saved me money again!
I used to pay £102 a month for a family gym membership for 1 year, and I only went about 5 times.
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Give your regular payments the once-over
If you're paying for something you don't need, or have forgotten about, STOP! There are three types of regular payment, and it's possible all three could be leaving your coffers, and many you may not even know about. Many regular payments are quarterly, bi-annual or yearly so check back over 12 months to ensure you cover all outgoings.
ALWAYS check you're allowed to cancel before doing so. If you're in a contract, cancelling could be a breach, leaving you with penalty fees. See our section on contracts below.
Now you're ready for your direct debit audit, use these steps to weed 'em out:
To start, you need to know what you're looking for. The first two to tackle are standing orders and direct debits.
How to audit 'em
Turn detective and use your statements to hunt them out. It's not just about your bank account; it applies to credit cards too:
Online banking. Most online accounts have a section which displays all your standing orders and direct debits. If not, you should at least be able to access a year's worth of statements.
Branch or phone-based accounts. Your account provider should be able to list all the standing orders and direct debits for you. If not, at the very least request a year's worth of statements.
A standing order's an instruction from you to your bank to pay a fixed amount out at regular intervals.
Cancelling standing orders: It's usually free, and you can cancel them when you want. You can do this through your standing orders and direct debits page on your online bank account or by phone.
Direct debits are set up when you sign a direct debit mandate to let companies take a fixed or variable amount of cash as needed, often each month.
Cancelling direct debits: Cancel a direct debit by contacting your bank or building society through online banking, or by phone. If there's an error you get a full refund from the bank, rather than the company itself.
However, it's best to check with the company concerned before cancelling in case you're in contract or need to give notice to cancel. See cancelling help.
These are the third type of regular payments. They're a little more complicated because you can't cancel them on your own – but you can tell your card provider to do so.
The key to recurring payments is the company will ask for the long number on your credit or debit card rather than your bank details. If this happens an entirely different structure of rules comes into play. See our full Recurring Payments guide.
How to audit 'em
They can be tough to spot. You may have set one up for mags, telecoms or websites (including adult websites) without realising. It's also known as a 'continuous payment authority'. Effectively it's a permission to take payment regularly when needed, so it just looks like anything else on your statement.
Scarily, you may find you've got recurring payments for companies you haven't heard of. Try a quick Google search to identify them, or contact your bank or card provider. They could be:
Unused gym memberships
Unused subscription TV channels
Unread magazine subscriptions
Old dating site memberships
Unused packaged bank accounts
Unused club memberships (eg, golf)
Insurance for items you no longer have
Unwanted charity direct debits
Some MoneySavers who regularly check their bank accounts have reported finding direct debits and/or continuous card payments they didn't realise they'd set up. If it's happened to you, it may be related to a free trial followed by a monthly subscription after making an online purchase.
Cancelling recurring payments: It's best to contact the company taking the payment first and ask it to cancel it. If it refuses, you can also contact your bank or card provider and tell it to cancel it.
If you've not been receiving any goods or services in return for your payment (this isn't paying for a gym or golf club, but just not bothering to go) then you may be able to get some payments back. Ask the company taking the recurring payment first. If it refuses to refund, you can try the chargeback process with your card provider.
Again – even if you're cancelling with your bank or card provider – it's best to check with the company concerned before cancelling in case you're in contract or need to give notice to cancel. See cancelling help.
There are a couple of services that'll help you audit payments going out of your account. They're free to use, but you will need to give them access to your bank account(s). Also, be prepared that once they've found out about your regular payments and direct debits, they'll try to switch you to cheaper services – ensure you know you're getting the best deal.
Bean* scans your accounts to find recurring direct debits and payments for anything from overpriced bills to unused gym memberships. It helps you find and switch to places where you could be spending less and helps you cancel any unwanted payments. Plus it offers a switching service on energy (comparing the whole market), broadband (comparing 14 major providers) and entertainment products, eg, Netflix.
If you sign up for our blagged deal through this link*, you'll receive a £5 Amazon voucher after you complete its sign-up stages – including attaching a bank account or credit card. You need to keep at least one account linked for 30 days and stay subscribed to its emails. The voucher will then arrive within six days.
Bean is authorised under 'Open Banking' regulations, meaning you're protected if, for example, sharing your data left you a victim of fraud. Check out our Open Banking guide to find out more.
Alternatively, new service Smartbill finds, tracks and cancels your unwanted subscriptions for you, including recurring payments. Once you sign up, Smartbill cancels any unwanted subscriptions for you, or works with you to help you cancel them yourself. It also suggests cheaper options to switch to for energy (checking the whole market) and mobile contracts (checking only major providers).
It's authorised by the Financial Conduct Authority under 'Open Banking' regulations, meaning you're protected if, as above, sharing your data left you a victim of fraud.
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Don't know what something on your statement means?
It can sometimes seem like bank statements are written in a foreign language. So, while you might easily recognise your weekly shop at Tesco or your monthly direct debit for Sky TV, would you know what REV or TFR means?
If you've checked your account and don't recognise something, see if we've got it in our glossary guide of bank statement codes and abbreviations.
Oh, and REV and TFR? That's bank speak for "reversal" – where a standing order or direct debit has been returned unpaid – and "transfer" – where you've transferred money between your accounts with that bank.
Is it worth it?
This is the real backbone of being a Cancellation Hero – evaluating whether each payment is worth it. With every single one you find, ask three questions (see Martin's Money Mantras). Work through these three key questions, then if it isn't doing you any good, CANCEL IT (ensure you aren't in breach of contract by doing so first, see below).
Ask yourself: Do I use it?
Ask yourself if you actually use what you're paying for. Be ruthless. Many people think they use a magazine subscription when they actually only glance through one in five copies. So in this case, buying individual mags only when needed is likely to cost far less, making the unused mag subscription a waste of cash.
I just checked Jan membership renewals (I work in a health club) 8.65% who joined last Jan came 10 times or fewer"
- via Twitter
Ask yourself: Is it worth it?
To help, work out the real cost per go. For example, use a £50-a-month gym membership three times a week and you're effectively paying just over £4 a time. Yet go three times a year and you're effectively paying £200 for each workout – the same as a posh spa weekend! Some Cancellation Hero confessions sent to us via Twitter:
I worked out I've paid £140 for a 20 minute swim!
I once paid £1,440 golf membership for 18 holes!
A friend worked out that last year, each gym visit cost £76.
Even if the payment's for something worthwhile, that still doesn't mean there aren't dangers (see below).
Ask yourself: Is it available cheaper elsewhere?
Of course, being a Cancellation Hero is primarily about cancelling unnecessary regular payments altogether. But if you don't want to cancel, see if it's available for cheaper elsewhere. There's masses you can do to swashbuckle down pricey subscriptions:
Gyms: Check out cheap pay-as-you-go, no-frills and council gyms, plus there are loads of free trials available to help you pick. Find full info in the Cheap Gyms guide.
Energy bills: Switching can cut costs by £200+ over a year, plus you can bag cashback on top. See Cheap Gas and Electricity.
Magazines: If you rarely read them, it may be cheaper to just buy them individually when you'll read them. If you want to keep your subscription, here's a trick to help. Tesco Clubcard points are worth more if used on Tesco Deals. These include mag subscriptions, eg, InStyle, Cosmo and Nat Geographic, meaning you can effectively get them for about half price. See the Reclaim Lost Tesco Points guide.
TV subscriptions: Check what you watch with a channel audit, then use comparison sites uSwitch* and Simplify Digital* to see if you can get it for less – see Cheap Digital TV for the full bag of tricks.
Haggle, haggle, haggle! Even if you do use it, see if you can haggle it down. A five-minute call can save £100s. See the Haggle on the High Street guide for more. Plus, if you're making regular payments for car or home insurance, you're being stung (see below). Some inspiration sent in via Twitter and the Cancellation Success forum:
I did what you said and haggled. Managed to save nearly £400 on a two-person LA Fitness gym membership. Thank you!
Phoned and asked what they could do for a loyal existing customer. Without hesitation I was given free line rental for a year saving me nearly £150.
Phoned bank to 'discuss' cancelling my pay-monthly account and got it half price for six months.
We want to know what wasted payments you've found and what you've saved. Let us know in the Cancellation Success discussion.
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Am I allowed to cancel?
You can cancel direct debits and standing orders when you like, but there are two crucial points to check before you do this:
Check whether you're in contract before cancelling.
If you're in a contract cancelling may be a breach, so check the paperwork first.
Notice may be required, or there may be penalties for early cancellation (which can be cheaper than keeping it going). It's especially been a problem with gyms, though the situation now differs depending on who you're with – see Cancelling Gym Contract Help for more.
Don't think: "I've not claimed on my insurance so it's worthless".
Even Cancellation Heroes treat insurance carefully. By definition, you pay hoping you won't use it. Of course, that doesn't automatically make it good value, but think carefully before cancelling.