default notice on settled account

[steelman99]

I renewed our travel insurance last year and as things were a bit tight I signed up to pay it over a year
as things have now improved and im moving my current account to a diffrent bank , I decided to pay the loan off.

The loan was arranged through company called premium credit and I rang them on the 7th March to ask for a settlement figure and paid them the ammount they asked for in full by Debit card - ( they gave me a 62p discount for settling early)

The following day I checked online that the payment had been applied - the account still showed a 62p balance but it said on the statement that any outstanding balances less than £1 would be waived on closure of the account.

Following this I cancelled the DD as I did not want it transfering to the new Bank account

Today I have recived a default notice as I cancelled the DD and so they could not take any further payments and they are trying to charge me £25 for the privilage of sending this notice plus if I do not pay this and reenstate the DD they will cancel my travel insurance

First thoughts were to ring them up on Monday morning and give them it both barrels - but is there a propper way to challenge this ? as far as im concerned you cant default on closed paid up account

Main concern is that they will try and cancel the travel insurance as Im going away in just over 10 days time for a holiday and dont want to be without travel insurance

Any advice or suggestions welcome