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Things to know about cancelled Direct Debits

Direct Debits are a popular form of payment for businesses because they’re an almost-guaranteed source of income on a regular basis, either from customers or clients. However, when a customer abruptly cancels a Direct Debit without informing you, it can cause problems for your business. Continue reading to find out more about cancelled Direct Debits.

How to cancel a Direct Debit

The important thing to remember as a business owner is that customers and clients can cancel their Direct Debits at any point in time. With the advancements in mobile and online banking, members of the public have more control over their Direct Debits at their fingertips, allowing them to cancel or amend them with ease.

In order to cancel a Direct Debit, a customer or client should notify your company as well as their bank. If a customer notifies their bank that they’d like to cancel a Direct Debit, you will receive an ADDACS, which stands for Automated Direct Debit Amendment and Cancellation Service. At this stage, the Direct Debit has been cancelled and the notification from ADDACS is for your information and allows you to update your in-house systems to reflect the cancellation. It’s also an opportunity for you to prompt the customer.

Should the customer or client cancel a Direct Debit in the middle of a contractual period, it is your responsibility to contact them to discuss payment options.

What happens if you cancel a Direct Debit without the approval of the company?

If you were to cancel a Direct Debit without informing the company of your decision, you may still receive a payment charge from your account. The company could also take action against you, especially if you’re still in a contractual relationship.

Once the company has found out about the cancelled Direct Debit, they will likely contact you to discuss the reasons behind your decision and inform you of the next steps to continuing your payments, if contracted.

Benefits of Direct Debits

There are many advantages to Direct Debits, for both the customer and company, which is why they’re so popular for many services. Direct Debits are used to pay for things like bills, TV streaming services, phone contracts and much more.

Here are just some of the many benefits of Direct Debits:

  • Guaranteed payment - Direct Debit ensures that the payment of a specified amount is made on a fixed date. In the event of an error, all money is refunded back to the bank account.
  • Peace of mind - Direct Debit payments come out of the bank account automatically at fixed intervals, so there’s no need to manually process and send payments, reducing stress over finances.
  • Saves time - Automatic payments leaving a bank account every month saves time because there’s no need to manually process payments.
  • Spreads cost - Direct debit allows you to spread payments over a period that the company you’re paying agrees to.

Impact of cancelled Direct Debits on businesses

Because so many businesses in the modern era rely heavily on Direct Debit payments, any cancellations can have an impact on finances. No matter the size of the business, whether it’s small or large, a Direct Debit that’s cancelled without any prior consultation can impact finances and operations.

If a company receives an ADDACS stating a customer has cancelled a Direct Debit, they not only have to use their resources to contact that customer to discuss the situation, but it can impact their finances until payments are resolved. For a large corporation, it won’t really dent their finances, but for small and medium businesses it can be detrimental - especially if they were relying on the payments from Direct Debit.

It is for reasons like this that many companies are now making use of Direct Debit management software and Direct Debit providers, like Interbacs.

Direct Debit support from Interbacs

Here at Interbacs, a trusted Direct Debit provider, we have a wealth of experience in delivering payment management solutions and may be able to help your company go to the next level with your payment processes.

However you’d like to manage Direct Debits, Interbacs has the tools and advice you need to streamline your processes and comply with Bacs rules, thanks to our Bacs software.

If you’d like Interbacs to handle your Direct Debit processes, then our intelligent Direct Debit software can take away any stress and allow you to focus more time and resources on core business operations. If anybody was to cancel a Direct Debit with you in the future, our software can handle the whole process with ease.

If this sounds like something you’d be interested in, contact us today on 0161 667 0758 or email us at

Check out our range of blogs on a variety of Direct Debit topics, including Direct Debit vs Standing Orders and how to streamline business processes.