Consumers CAN stop direct debits
The Australian Securities & Investments Commission has ruled that customers can cancel direct debit payment arrangements with providers either through the merchant itself or the financial institution that holds your account.
Banks in Australia will no longer be able to claim they cannot legally cancel direct debits from credit cards. ASIC stepped in to clarify customer rights after a flood of complaints following the One.Tel collapse.
The only complication seems to be in credit card direct debits where the financial institution may have technical issues preventing it cancelling a direct debit. In such cases, going direct to the merchant for cancellation may remian the only option.
All requests for cancel of a direct debit must be in writing, ASIC says.
Bank statistics show direct debits have reached about 10 per cent of all payments and that daily transactions have doubled from 600,000 to 1.2 million in three years. However, many customers had complained banks refused to stop payments going out.
All financial institutions, including banks, have been notified of the ruling through the Australian Payments Clearing Association.