MARTIN Lewis has explained how you could save hundreds of pounds by cancelling unwanted direct debits and other regular payments.
The warning comes after the MoneySavingExpert founder heard from one person who discovered the previous owner of her property is still paying home insurance.
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The previous owner is forking out £200 a month on the insurance policy 16 years after they moved out – amounting to an eye-watering £3,200.
The story from the viewer sparked an urgent warning from Martin for households to check their regular payments for services they don’t need.
Martin explained that there are three types of regular payments you should be aware of – direct debits, standing orders and recurring payments.
Each of these involve setting up payments that come out of your bank account on the same date each month, but they way you set them up differs.
Different types of regular payments explained
DIRECT debits are the most common form of regular payments – but there are others you should be aware of.
Before you go cancelling, check if you’re still in contact with the company who is taking these payments.
If you’re still in contact, check if stopping a regular payment is a breach, or if you’ll face a penalty for stopping payments.
Direct debits: A direct debit is when you give your bank account sort code to a company so they can take a regular payment from you. These payments are protected by the Direct Debit Guarantee.
Standing orders: These types of payments are set up by you through your bank as an instruction to pay someone each month.
Recurring payments: Recurring payments are when you give a company the long number on your credit or debit card and they can then take a regular payment.
Speaking on his ITV Martin Lewis Money Show last Thursday, February 11, Martin said: “Check your direct debits, check your standing orders. Are you dripping money away?
“Go and check them and check there’s nothing in there you shouldn’t be paying for.
“If you’re out of contract, cancel it and you could save money.”
How to check for unwanted regular payments
Martin suggests going through your bank account and credit card statements to see if you’re making payments for services that you don’t need.
This could include everything from unwanted insurance policies, TV streaming services that you don’t use, or gym memberships.
But before you think of cancelling, check whether you’re still in contact.
If you are still in a contract, cancelling payments could be a breach – so go through your paperwork carefully.
You may also need to give notice before stopping any payments, or there could be a fee for cancelling early.
How to cancel regular payments
If you’re able to cancel, you’ll usually need to speak to your bank to stop any unwanted payments.
This can be done over the phone, in branch, or you can sometimes cancel a payment yourself through online banking.
This applies to direct debits, standing orders and recurring payments.
With recurring payments, Martin explained that you don’t have the same rights as direct debits, which are covered by the Direct Debit Guarantee.
This guarantee means you’re protected if something goes wrong with your payment, such as if it comes out on the wrong day.
If your bank refuses to stop a recurring payment, you can take your complaint to the free Financial Ombudsman Service.
Martin said: “You used to not be able to cancel [recurring payments] without going to the company.
“You can now, if you want to cancel it, call your bank.”
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In more of his money-saving tips, Martin has urged Brits to apply for £5,000 Green Homes Grant vouchers before money put into the scheme runs out.
The money guru has also weighed in on whether it’s cheaper to leave the heating on all day or switch it on when needed.
Martin explains how to claim back thousands of pounds from your bank.
