How to Cancel a Direct Debit in Australia: The Letter to Send Your Bank

To cancel a direct debit in Australia, you can go to your own bank as well as the business taking the money. Tell the bank in writing which debit to stop and from what date, and ask it to confirm in writing. Then tell the business too, and keep copies of everything you send.

Claim Done drafts a direct debit cancellation letter to your bank from your answers for a flat A$29. You download it straight away and send it to your bank yourself.

Direct debit or recurring card payment: check which one you have

These two look the same on a statement, but they are cancelled in different ways. The Banking Code of Practice defines a direct debit as a regular payment from a deposit account, set up by giving the business your BSB and account number. A recurring payment is a regular payment from a credit or debit card, set up by giving your card number, expiry date and security code.

Not sure which you have? The Code says that if you ask, your bank will give you a list of the direct debits and recurring payments on your accounts for up to the previous 13 months.

You can cancel through your bank, not only the business

For a direct debit from a bank account, the business is not the only path. Moneysmart, the Australian Government’s money website, says that to cancel a direct debit from your bank account you contact your bank, tell it when you want the payments to stop, and ask for a letter confirming your request. Once the bank receives your request, it has to stop the payments and forward your cancellation to the service provider’s bank.

The Banking Code of Practice says you can ask the bank to cancel your direct debit request and it will promptly process this. ASIC approved the current Code, which started on 28 February 2025, and says its rules are binding on Australian Banking Association member banks. The Code applies to individuals and small businesses. If your institution has not adopted the Code, check its own terms and conditions.

A recurring payment on a card is different. Moneysmart says that for a recurring payment from a credit card, you have to contact your service provider first, then your bank.

What the cancellation letter must say

The letter has one job: let the bank find the debit and stop it. It should cover:

• your name and that you are the account holder
• the business name exactly as it appears on your statement
• the amount taken each time and how often
• the account the money comes from (BSB and account number), or for a card the last four digits only
• the date of the last debit or the next one due, if you know it
• a clear instruction to cancel the direct debit, and whether that is from now or from the next due date
• whether you have already asked the business to stop
• a request for written confirmation. Never include a full card number.

How the letter is set out

The Claim Done letter follows this structure, built only from your answers.

1. Your details and the bank’s details. Your name, the bank’s name, and the date.
2. Background. You hold the account and want a direct debit cancelled. If you already cancelled with the business and money is still coming out, one plain sentence says so.
3. The direct debit. The business name from your statement, the amount and frequency, the account or the last four digits of the card, and the last or next debit date.
4. The request. An instruction to cancel or stop the debit from the date you chose, and a request for written confirmation.
5. The contract is a separate matter. The letter is about stopping the payment. Anything owed to the business stays between you and the business.
6. If the request is not actioned. One calm line about the bank’s complaints process and the Australian Financial Complaints Authority.
7. Signature and date.

Who gets the letter, and what to keep

The letter goes to your bank. The Code says banks will provide information on their websites about how direct debits can be cancelled, so check there for where to send it.

Moneysmart says it is a good idea to write or email the service provider as well, though you do not have to. That means two messages: the letter to the bank, and a short note to the business. If you also want to end the service, tell the business in the way your contract requires.

Keep copies of any letters or emails you send, and the bank’s written confirmation. If you phone the bank, ask for a reference number.

If money is still taken after you cancelled

Check your statement after the next due date. If a debit still comes out:

1. Contact your bank straight away. Moneysmart says that if you find an incorrect or unauthorised transaction, you should contact your bank as soon as possible. The Code says you can ask your bank to investigate an unauthorised direct debit and it will act promptly to assist you.
2. Check for fees. Moneysmart says that if your account is debited after you asked your bank to cancel the direct debit, the bank cannot charge you overdraft fees to cover the debit.
3. For a card, dispute the transaction. Under the Code, if you tell your bank you dispute a card transaction within the time limit set by the card scheme rules, the bank will claim the amount back if it finds it was incorrectly charged and you did not contribute to the loss. This applies even where the charge was part of a recurring payment arrangement. Ask your bank what the time limit is.
4. Complain if the bank does not act. Moneysmart says that if your bank does not cancel your direct debit when you ask, you can make a complaint. The first step is a formal complaint through the bank’s internal dispute resolution process. If you are unhappy with that process, you can take the complaint to the Australian Financial Complaints Authority (AFCA). AFCA’s service is free and independent, and time limits apply, so go to AFCA as soon as possible after the bank has finished considering your complaint.

The Claim Done letter asks the bank to stop future debits. It is not a claim to get back money already taken, so raise that with your bank separately.

Cancelling the debit does not end the contract

Stopping the payment is not the same as ending the agreement. Moneysmart says that if paying by direct debit is a condition of the service, you should consider getting legal advice before you cancel, and that if you still owe money for a service, you will need to negotiate another way to pay.

Gym memberships are the common example. NSW Fair Trading says that a membership expiring does not mean the direct debits stop, that you often need to give the gym 30 days written notice, and that you should talk to your financial institution to make sure payments do not continue. The Queensland Government says you need to cancel a gym membership in writing, and that if you stop paying instalments before the agreement allows, you may have to pay damages for breach of the agreement. In other States and Territories, check with your fair trading or consumer affairs office.

Mistakes to avoid

• Cancelling the debit and thinking the membership or subscription has ended. Cancel the service with the business as well.
• Asking by phone only, with nothing in writing.
• For a card payment, writing to the bank without contacting the business first.
• Writing a full card number in any letter or email.
• Ignoring money that is still owed.

If you want the letter written for you, answer a few questions and Claim Done will draft your direct debit cancellation request as a PDF, ready to send to your bank. Claim Done is not a law firm and does not give legal advice.