Cancellations of Direct Debits in New Zealand operate slightly differently than in other Direct Debit schemes.
There are 3 ways for a customer to cancel a Direct Debit, and depending on which is chosen, this could trigger an unintended result.
The 2 recommended ways for a customer to cancel a Direct Debit are:
- Via the merchant they're paying
- Via GoCardless
If requesting cancellation via either the merchant or GoCardless, the cancellation is actioned direct within the GoCardless system.
The third way for a customer to cancel is by contacting their bank - this is the method we would advise against.
In this case, the customer's bank will cancel all Direct Debits set up against a merchant's authorisation code, i.e., if a customer has multiple Direct Debit Instructions or subscriptions set up with a single merchant, they would all be cancelled.
If the customer then wishes to set up a new Direct Debit against the same authorisation code within 9 months of the initial cancellation:
- They're required to provide their bank with a paper authorisation form
- They can't be charged for a minimum of 10 business days following their new Direct Debit being set up
Please therefore advise your customers to cancel any Direct Debits via either of the 2 recommended methods above, rather than via their bank.