The Code Compliance Monitoring Committee for the Code of Banking Practice has announced that to test bank obligations in respect of cancellation of direct debit requests it is conducting a shadow shopping exercise, with both telephone calls and branch visits.

Banks are obliged to promptly process a customer instruction to cancel a direct debit request without the need to first raise the request with the service provider.

In addition to this being a customer service issue for the Banks, the Committee noted it is now compounded by increasing hardship where transaction accounts with nil or negative balances are being charged a dishonour fee, for direct debits that the Bank has failed to cancel as instructed.

The Mutual Banking Code of Practice will have a similar provision.