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Cancelled Direct Debit? The rules on setting up a replacement


​One of the safeguards of the Direct Debit Guarantee is that a customer may cancel a Direct Debit Instruction (DDI) at any time. They may do this in the belief their contract has successfully completed and that payments are no longer required or simply they no longer wish to pay by this method. If your customer cancels a DDI with their Payment Service Provider (PSP) you will receive an ADDACS advice advising you of this.

In instances where funds are outstanding, you must contact your customer to clarify how the funds are to be repaid. If your customer wishes to continue to pay by Direct Debit you must obtain the customer’s authority to set up a new DDI. Failure to do so may result in indemnity claims being raised against your organisation or result in you receiving a complaint. As per the Service User’s Guide and Rules to the Direct Debit Scheme (section 6A.3) ,  service users must be able to provide a copy of the new Direct Debit authority which states a date that is after the cancelled DDI date.

In essence, a service user must not replace a cancelled Direct Debit Instruction without the customer’s authorisation.

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