Westpac has added a feature to its mobile and online banking services to allow customers to manage their direct debits more easily – an area of long-standing frustration for many consumers.
By searching “cancel a direct debit” in their banking app or online, and then selecting from their list of regular direct debits, customers can place a block on a company debiting funds from the account.
The block will remain in place for three years, unless the customer decides to remove it earlier or cancel the direct debit arrangement.
The facility is available for consumer and sole trader business customers.
In 2021, the Banking Code Compliance Committee reported the results of a mystery shop it conducted to check banks’ compliance with their obligation under the Banking Code of Practice to cancel direct debits on request.
It said that 71 per cent of interactions indicated that the bank would comply, meaning that 29 per cent of the time a customer may be given incorrect information, such as being told they should contact the merchant.
The BCCC said this result was “far below” its expectations and called on banks to improve compliance.
Traditional direct debit arrangements are likely to be phased out in coming years as PayTo takes over as a more user-friendly and safer version of consumer direct debits.
A Westpac spokesperson said the bank has offered PayTo since April but it could be a long time before direct debits are phased out. In the meantime, the bank has removed a pain point.