Friday 27 April 2018

Millions 'forget direct debits'

Millions of people have direct debits paying for services they no longer use, research says
Millions of people have direct debits paying for services they no longer use, research says

Nearly three million Britons are paying for services they may no longer need or use because of direct debits they have forgotten about, research has suggested.

Some 6% of people told MoneySupermarket they had spotted direct debits in their bank statements which had slipped their memory, which could equate to 2.68 million people if the findings were projected nationally.

Younger people are twice as likely to forget about a direct debit, with one in 10 18 to 34-year-olds saying they had set one up which they later could not remember.

More than a third (38%) of people surveyed admitted they do not have a clue how much cash regularly leaves their account in direct debits.

Nine out of 10 current account holders use direct debits and the average monthly total amount paid is £302, with a quarter of people paying more than £500 each month, the comparison website said.

Direct debits are often used by people as a convenient way of automatically paying regular bills from their current accounts, such as council tax, gym memberships or TV licence subscriptions.

They can be set up by signing a mandate form or by the consumer contacting their bank and the money is taken directly by the company receiving the payment.

Under a guarantee scheme, direct debit recipients must tell consumers in advance if there is a change in the amount or date of the payment and people have a right to a full and immediate refund if those receiving the payment or the bank makes a mistake.

Kevin Mountford, head of banking at MoneySupermarket said: "Households face a huge number of outgoings which they may lose track of, therefore an automatic payment can help to keep on top of managing bills and avoid the issue of missing payments and accruing charges and fines.

"Every penny counts right now, especially as we're heading into a costly festive season and many people may be looking for ways to get a cash boost in time for Christmas. Checking all outgoings and making sure you are not paying for products or services you no longer use is an easy step to do just that."

Press Association

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