There has been much debate about difficulties encountered when trying to cancel a debit order. Technically the process is simple but if the company you are dealing with wants to hold on to your money a little longer they can delay the cancellation indefinitely and there is very little you can do about it.

A debit order is the authority you give to an individual or company to deduct money that you owe from your bank account. The banks simply process the debit it orders.

To put a stop to deductions, you have to cancel a debit order with the company involved. The only effective way to stop a company from taking the money from your account is to close it. This action is radical and inconvenient to say the least but this is what some victims have had to resort to.

Your bank can't stop a debit order from going through your account, as the instruction to cancel must come from the vendor. There are reported cases of some individuals who have fought for a year to have a debit order cancelled. The onus is on you to ensure that the company you are dealing with is legitimate and that you really do want to commit to the product on a long-term basis.

There are many different services offered on a debit order system of payment, and they can be a very convenient way of paying bills. However one must always bear in mind that personal circumstances change, and even if you believe that you will always want to subscribe to your favourite magazine, you could move overseas or develop another interest.

So do not make a habit of signing long-term debit orders. Rather sign up for shorter periods and renew on a regular basis. Even though cancelling a debit order is up to the vendor your bank should at least help you sort out unauthorised debits on your account.

If you are in a situation where you have to sign a debit order take the following precautions:

  • Only sign debit orders with reputable companies that have been in business for a reasonable period of time.
  • Read the small print.
  • Place a limit on the amount that can be deducted from your account but allow for fluctuating payments. For example, if your cell phone account ranges from R350 to R500 specify an upper limit of R600 on the form.
  • Write in an expiry date when you sign the form even if you will be using the service for an extended period. It is easier to renew than to cancel.

    A better way to deal with monthly deductions is to set up a stop order. A stop order is an instruction to your bank to pay a fixed amount to a person or company on a regular basis. You have full control over a stop order and can stop it at any time by notifying your bank.