So you cancelled a direct debit but you’re still being charged

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cancel a direct debit stop a direct debit

How to follow the correct process to ensure direct debit payments stop

Direct debits can certainly be a convenient way to pay your bills. You don’t have to worry about forgetting to pay by the due date – although you do have to remember to have money in your account – and some providers will even offer you discounts for using direct debit.

Problems can arise, though, when it is time to cancel your direct debit. Maybe you have switched energy providers or maybe you’re sick of paying for a gym membership you no longer use. Whatever the reason, you are well within your rights to stop the direct debit but sometimes it might be easier said than done.

The process will be different depending on whether the payment is coming out of your bank account or out of your debit or credit card.

Most institutions refer to the first as a direct debit but the latter as a recurring payment.

Keep in mind that even though a debit card is linked to your bank account, if you have used the numbers listed on the front of the card rather than the BSB and account number it will be treated like a credit card payment.

If you want to stop a direct debit from your bank account you need to contact your financial institution. You can do this over the phone but making the request in writing is probably a good idea. You can find a sample letter at moneysmart.gov.au or consumeraction.org.au.

As a courtesy, you can tell the merchant that the direct debit has been cancelled and this may make the process even quicker. Make sure you aren’t breaching your contract, though.

The Consumer Action Law Centre warns that stopping payments under a contract without lawful grounds may result in a debt being owed and suggests you seek advice if you are unsure.

Contact the bank a few days later to make sure it has cancelled the direct debit and also keep an eye on your statement. If a payment comes out after you have requested the cancellation, make a complaint to your institution and it should reimburse your account.

If the regular payment is coming out of your debit or credit card, then you must write a letter to the service provider to request that the payments stop. This time it’s up to the merchant to cancel the payments rather than the bank or credit union.

You should still send a letter to your financial institution and include a copy of the letter you sent to the service provider. Again you can find sample letters online.

A few days after you have sent the letter it’s a good idea to call the service provider to make sure it has received your request and acted on it.

If a payment still comes out after you requested the cancellation, then contact your credit card provider as soon as possible to dispute the transaction and it should arrange a charge-back.

Swans, bunnies and rhinos – economic terminology explained

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By Nader Naeimi
Head of Dynamic Markets and Portfolio Manager of Dynamic Markets FundSydney, Australia

In a recent address to senior Chinese Communist Party officials, President Xi Jinping warned of the threat posed by “black swans” and “grey rhinos”. They are both terms that have entered popular use over the last decade to describe perceptions of risk in a market economy. But what do they – and other animal metaphors used to describe economic conditions – mean?

Black swans

The term black swan was coined by the ancient Greeks to describe an impossible event. It was used for centuries by Europeans who had only ever seen white swans. This changed when Europeans discovered Australia and saw, for the first time, black swans.

A black swan is now used to describe an event which is outside the realm of prior expectations, but which carries an extreme impact, and is prone to post-rationalisation in order to explain its occurrence. The terrorist attacks of September 11, 2001 are often described as a typical black swan; it was unanticipated, but easily explained in hindsight, and the signals for such attacks in the future are now commonly discussed and recognised.

Grey rhinos

In contrast to the low-probability black swan, the grey rhino is a high-impact, high-probability event that for various reasons is usually ignored by investors and policy makers. It could be used to characterise problems such as climate change, debt, and economic inequality.

Why the animal names?

The use of animals as metaphors dates back to the some of the earliest human literature, with the likes of Aesop employing animal characters to explain the limitations of human reasoning. John Maynard Keynes, in his General Theory of Employment, Interest, and Money, coined the term ‘animal spirits’ to describe economic decisions taken as a result of a spontaneous urge to action, rather than a rational evaluation of the consequences1.

Bulls, bears and bunnies

Today analysts continue to ascribe animal characteristics to market behaviour, most notably in reference to bull and bear markets. The most interesting theory for the origin of these terms comes from the North American bearskin trade, where ‘bear-jobbers’ would short-sell skins in the hope that prices would fall2. The term ‘bear-jobber’, later shortened to ‘bear’, found its way to the stock market, and a ‘bear’s market’ became common terminology for a falling market. According to this explanation, the term ‘bull’ was added later.

More recently, the zoo has expanded to include gummy bears (bear markets which satisfy technical definitions but which return to pre-bear levels within a year) and grizzly bears (where falls are much deeper and last much longer, as in the global financial crisis).

In my experience, the progression through both bull and bear markets can be characterised by a number of stages:

The three stages of a bull market:

  1. A few forward-looking people begin to believe things will improve or get less bad.
  2. Most investors realise improvement is actually taking place.
  3. Everyone concludes things will get better forever.

The three stages of a bear market:

  1. Just a few investors recognise that despite the prevailing bullishness, things won’t always be rosy.
  2.  Most investors recognise things are deteriorating.
  3. Everyone’s convinced things can only get worse.

The final, and perhaps least-known, member of the menagerie is the bunny market, the meaning of which should be immediately obvious: it’s a market which hops up and down but doesn’t really go anywhere.