Brits wasting £160 million on unwanted direct debits
19 September 2003
Brits are wasting an estimated £160 million on magazine subscriptions, gym memberships and mobile phone contracts.
A study for online bank Cahoot shows that UK consumers are simply forgetting to cancel millions of pounds worth of direct debits each year.
Researchers found that 81 per cent of people continue paying for two or more months for a gym membership they no longer use, 77 per cent keep their Direct Debit for a magazine subscription for two or more months after it is no longer required and half (52 per cent) of those paying for mobile phone they no longer use by Direct Debit continue to pay for it for two months or more without bothering to cancel it.
Deborah Cutler, Cahoot's Marketing Director, says: "Direct Debits are a very convenient way of paying for regular subscriptions, but this research demonstrates how people need to take control of their finances if they are to be used effectively.
"If you are no longer using your gym or want a magazine subscription, it's important to cancel the Direct Debit or you could potentially find yourself hundreds of pounds out of pocket."
However, Cahoot found that respondents were better at dealing with utilities bills, with a fifth (21 per cent) noticing within a month that they needed to cancel a direct debit.
The study found that young people were most likely to pay all their bills by Direct Debit, while forty-five percent of the UK adult population actively prefer to pay their bills by Direct Debit, with 75 per cent paying at least one bill that way.
Cahoot advises that consumers ask their bank for a list of Direct Debits and check they are all still needed, regularly check statements to see the right amount is being debited and cancel any Direct Debits for services that are no longer needed, ensuring that the service provider is also informed.