Hi
The reason British Gas do this now is 'cos DDs and all payment plans are worked out over the year, so 12 equal payments.
When you request a refund they cancel the DD to release funds. They usually advise against it as it can put your payments up, e.g. credit built towards winter bills.
They usually cancel your DD, refund the money by cheque, and then reset your DD whilst online. You should not need to do anything. Sounds like you did not receive great service!
Hope that clears it up a bit!
Good luck
Nikki