The ability to instantly cancel a Direct Debit is an important right for your customers. It means they can cancel a payment before it is made if they think it’s incorrect.
It’s important that you know how to handle cancellations to make sure Direct Debit continues to be a convenient and effective payment method for you and your customers.
Four things you need to know about cancelling Direct Debit payments
1. Customers can cancel a Direct Debit at any time. Your customer can cancel a Direct Debit mandate at any time either by informing you directly or through their bank. If a customer asks you to cancel a mandate make sure they also notify their bank.
2. You will be notified of a cancellation by ADDACS message. If your customer asks their bank to cancel a mandate the bank will do so immediately and you will be notified of the cancellation by an ADDACs message. For details of ADDACs messages see our guide to messages from the banks.
3. You must apply any cancellations immediately. You must apply any changes immediately or within three working days of receiving an ADDACS message. Make sure you regularly check for reports from the bank.
4. Failure to act can result in an indemnity claim. If you can’t act on the notice of cancellation before the next payment date your customer may be entitled to make an indemnity claim. You should keep records of any ADDACS messages to respond to any future indemnity claims.
GoCardless helps you to keep on top of any cancellations
GoCardless deals with any cancellations for you by:
Handling any reports on your behalf. We receive any reports from the bank and use this information to make any updates.
Immediately cancelling any instructions on receiving a message from your customer
To find out more about how GoCardless can help you to handle Direct Debit cancellations, book a chat with one of our Direct Debit experts.‹ View all tips