Forgotten direct debits may be piling up debt

Many Britons who are struggling with debt could find part of the solution can be found by paying closer attention to their bank accounts.

A poll by Money Supermarket has found 5.37 per cent of consumers have noticed direct debits leaving their account that they had forgotten all about when looking at their statements.

This is the equivalent of 2.68 million people and many of those payments could be for goods and services no longer received, meaning consumers could be losing much-needed cash unnecessarily.

Younger people are most prone to this failing, with 11 per cent of those aged between 18 and 34 finding a payment they had forgotten about, but 38 per cent of the whole population are unsure what leaves their account each month.

Head of banking at the website Kevin Mountford commented: "Direct Debits are an easy and convenient way to make payments for household bills, subscriptions and memberships for the majority of bank account holders in the UK.

"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."

Those who are struggling with their debt may find they can benefit from checking over their accounts and finding any obsolete payments that they can stop. In some cases refunds may be sought.

Mr Mountfield warned those who do stop a direct debit to speak to their services provider first, as they could be charged a fee by their bank if the company seeks to claim the money. However, if a payment is made after the cancellation has been made it can be counted as an unauthorised transaction and refunded.

One reason many payments of this kind slip through unnoticed by consumers is a widespread reluctance among many to look closely at their statements.

A survey by Barclays has found 36 per cent of consumers put off opening statements or avoid doing this altogether, while 45 per cent could not say how much money is in their main account.

Just as the Money Supermarket survey found young people most likely to be unaware of direct debits, the Barclays study revealed they are more likely not to look at statements.

It revealed 55 per cent of those aged 18-24 put this off, more than the number who avoid making dental appointments (48 per cent).

Posted by Paul Thacker