How to remove a lender's continuous payment authority

[sequenci]

The payday loan firms will say this is not possible, but it is - in accordance with Regulation 55 of The Payment Services Regulations 2009:

 

55.—(1) A payment transaction is to be regarded as having been authorised by the payer for the purposes of this Part only if the payer has given its consent to—

 

(a)the execution of the payment transaction; or .

(b)the execution of a series of payment transactions of which that payment transaction forms part. .

(2) Such consent—

 

(a)may be given before or, if agreed between the payer and its payment service provider, after the execution of the payment transaction; and .

(b)must be given in the form, and in accordance with the procedure, agreed between the payer and its payment service provider. .

(3) The payer may withdraw its consent to a payment transaction at any time before the point at which the payment order can no longer be revoked under regulation 67.

 

(4) Subject to regulation 67(3) to (5), the payer may withdraw its consent to the execution of a series of payment transactions at any time with the effect that any future payment transactions are not regarded as authorised for the purposes of this Part.

 

This means that you can simply ask your bank to refuse the payments, it is also good practice to let the lender know too.

 

So, if you would like your creditor to stop trying to take a payment all you need to do, in theory, is to inform them that you remove their authority. It's probably better to do this in writing and via recorded delivery - if possible.

 

You can learn more about your rights via the following FSA guide:

 

http://www.fsa.gov.uk/static/pubs/consumer_info/know_your_rights_guide.pdf

 

And

 

http://www.fsa.gov.uk/pubs/consumer_info/know_your_rights_payments.pdf

[Michael Browne]

Cancelling a regular card payment

 

When you give your credit or debit card details to a company and authorise them to take regular payments from your account, such as for a gym membership or magazine subscription, it is known as a ‘recurring transaction’ or ‘continuous payment authority’.

 

These are often confused with direct debits, but do not offer the same guarantee if the amount or date of the payment changes.

 

In most cases, regular payments can be cancelled by telling the company taking the payments.

 

However, you have the right to cancel them directly with your bank or card issuer by telling

it that you have stopped permission for the payments. Your bank or card issuer must then stop them – it has no right to insist that you agree this first with the company taking the payments.

Be aware, though, that you will still be responsible for paying any money that you owe.

Page 15: http://www.fsa.gov.uk/static/pubs/co...ghts_guide.pdf

 

 

 

Consumer Focus submission to Payments Council regarding continuous payment authorities:

 

The Financial Services Authority (FSA) advice, as set out in its Know Your Rights booklet, is that if the bank makes a payment after the consumer has cancelled the CPA, then it will be an unauthorised transaction and therefore (as per the Payment Services Regulations 2009) the consumer will be entitled to an immediate refund from the bank. We doubt that many consumers are aware of their rights in this situation. Furthermore, we are concerned that this is not how banks have been consistently dealing with this problem, as illustrated with the issue of cancelled CPAs being charged to new cards (referred to above).

Edited February 8, 2012 by Michael Browne

[Michael Browne]

OFT play catch up

 

The OFT previously maintained that:

Unlike a direct debit, however, a continuous-payment authority is not covered by any bank guarantee and can only be cancelled by the business that holds the authority. Consumers often find this surprising. They generally assume the bank or credit card provider will ultimately be responsible for any overpayments

 

 

They have now launched a suplementary consultation on CPA's

 

Revised OFT guidance on debt collection (OFT664Rev) was published in October 2011.

Following representations received, the OFT has decided to undertake a supplementary consultation on its position on use of 'continuous payment authority' as a means of recovering monies owed in respect of consumer credit related debts as set out in paragraph 3.9m of that document.

 

We are also taking this opportunity to consult on the specific practice of debiting monies from an account in the absence of having the express authority to do so (including under circumstances in which the lender may have the authority, under a continuous payment authority or otherwise, to recover monies from another account(s)). This practice is dealt with in what could, subject to consultation, become a new paragraph 3.9n of the Guidance. This would replace what is currently the third bullet point of paragraph 3.9m in the revised Debt Collection Guidance.

http://www.oft.gov.uk/OFTwork/consul...supplementary/

[benregis]

Can I just check - are you saying that you can withdraw authority even if you owe the company money? I'm having horrendous problems with a payday loans company, with whom I have been trying to come to terms, but who are refusing to negotiate. I want if possible to keep my current account open (although I have moved my pay cheque to another account), but this is proving difficult as any money I pay into the account is snatched immediately by these sharks.

 

I have withdrawn permission via email and have forwarded it on to my bank. They have said that they can dispute transactions, but didn't appear to hold out much hope either to refund payments or to stop the transactions happening. I do want to pay the company off, although I'm disputing the total debt - but I want to do it in such a way as is fair to everyone and that doesn't bankrupt me.

[sequenci]

Can I just check - are you saying that you can withdraw authority even if you owe the company money?

 

Yes, either by contacting the lender directly - or by cancelling it with your bank.

[benregis]

Just came across this on the Guardian's website. Great to see that it's finally being publicised that you can say no to these kinds of payments : http://www.guardian.co.uk/money/2012/feb/24/continuous-payments-authority-know-your-rights?newsfeed=true

[osborne82]

iv just got of the phone to my bank to try and cancel a continuous payment and they were most unhelpfull basicaly said i was wrong and they couldnt cancel a payment and that was law ? he went on to say it was because its a financial service and they wernt allowed to get involved ?

is the above post valid? anyone know my next step if the bank isnt playing ball ?

 

thanks

[sequenci]

The law is stated in the first post. Who's the bank?

[osborne82]

The law is stated in the first post. Who's the bank?

 

Barclay's. Bank just a basic bank account

Thanks

[tomtom013]

I have had the problem with the Halifax. You can read my recent thread but in a nutshell the banks and PDLs don't give two monkey's. My guess is that until you complain to the FOS and have your compliant upheld they will continue to give two fingers.

[sequenci]

Barclay's. Bank just a basic bank account

Thanks

 

Sorry to hear this is happening. You should complain for sure.

[DarrenAs]

Hi. Has anyone had any success with this?

 

I followed the instructions and told my bank I had withdrawn consent for a payday company to take money from my account using continuous payment authority and they said in reply I could not do that.

 

Specifically they said: "When you enter into an agreement with a company the only way to cancel the payment is to cancel the agreement. If you do not cancel the agreement the company will still have a legal right to collect funds from your account which the bank cannot stop."

 

What do I do now? I've queried it again - but what happens if they won't budge?

thanks!

[Ell-enn]

I should print off this - send it to them and draw their attention to Page 15 http://www.fsa.gov.uk/static/pubs/consumer_info/know_your_rights_guide.pdf

[tomtom013]

Hi Darren,

 

I have had the same problem with the Halifax and have quoted them the FSA guidlines verbatim but they still won't budge. I do think the Halifax, all banks, know the FSA guidlines but bascially don't give a damn. It is my humble opinion that they expect 99.9% of customers to go away and not take their complaint any further.

 

You need to make and official complaint to your bank in writing, as I have done, if they still refuse to co-operate then you can take your complaint to the FOS. I am currently awaiting their response (Halifax) to my complaint about their refusal to cancel my PDL CPAs. More recently, they have not sent me a new debit card so I think they don't want my custom.

[DarrenAs]

Thanks Tom - please let me/us know how you get on. The weirdest thing is that this clause - matching the FSA ruling - is in Santander's own revised terms & conditions - it just seems no-one has told the staff...

[tomtom013]

I am not sure you are right. I have spoken to the halifax, including a supervisor, on numerous occasions and sense that it is 'NEW' policy. Whether this is driven by lots of people with PDLs ringing them to stop CPAs or whether its because the Halifax have adopted Lloyds policy I am not too sure. I can say that the Halifax until recently had a system that allowed their customer service staff to implement or initiate CPA charge backs but this avenue has been removed! In other words, even if the person you speak too agrees with what you say there is nothing they can do other than pass your complaint onto their customer relations/complaints department.

[sequenci]

That law's the law. And that's what it's been since 2009.

[tomtom013]

Hi Sequenci

 

I appreciate and thank you for highlighting current law surrounding CPAs as your post has lead me and others to beaware of it.

 

However, my concern is that some banks are not following the law and infact seem to be clearly flaunting it. I have asked the Halifax to stop these CPAs and they have refused, and have subsequently allowed numerous payments, totalling £230.00, to be taken from my partners account. So yes, while the law is clear to see, I also want to highlight and warn people that quoting the law to some banks may not be enough to protect them from PDLs taking unauthorised CPAs. I personally cannot currently afford or risk anymore PDLs to continue to dip into my account at will. With this, I suggest people divert there funds to another bank account or simply get a new account with another bank until such time that unco-operating banks start recognising and implementing the law.

[sequenci]

I know they flout it. All the time. It's massively frustrating. The only thing that can sort this mess out is mass complaints via the FOS. I totally agree that setting up a 'safe' account should be undertaken ASAP.

[DarrenAs]

hi Tomtom - it is incredibly frustrating, yes. I'm not sure what's going on at Santander as it is spelt out in their current account terms and conditions (http://products.santander.co.uk/bankaccounts/legaldetails.html) that customers can cancel CPAs. It says:

 

If you are stopping a recurring debit card transaction (that is, a continuous payment

transaction on your debit card initiated by a payee and authorising us to make payments)

you must also tell the payee. You should provide us with a copy of any notice of withdrawal of consent given to the payee. We will stop the payment provided that we receive notice from you no later than close of business on the working day prior to the date the payment was due to be made.

 

But when I try and do it they say there's no such policy. I've queried it again. We'll see.

 

And sequenci - I understand about setting up another bank account / moving wages etc. But isn't that irrelevant if a payday lender uses a CPA to take their payment?

 

The bank will pay out to the payday firm regardless of whether there is or isn't any money in your account, in my experience. So even if I move my wages elsewhere, I'll still have a negative balance plus overdraft charges in my old account...

[sequenci]

And sequenci - I understand about setting up another bank account / moving wages etc. But isn't that irrelevant if a payday lender uses a CPA to take their payment?

 

PErhaps not. If the funds are no longer in the account the lender may find that their card payment gets declined.

[DarrenAs]

Sadly I have experience of having payments taken out by payday lenders even when i have deliberately emptied my account The bank just honours the payments and puts me in an unauthorised overdraft.

 

I feel totally stuck. I spoke to my bank who again denied any knowledge of their own terms and conditions. They said the only way of stopping a payday loan payment would be to have my debit card blocked.

 

That cannot be right can it? I am prepared to do that, but I'm afraid it would be a waste of time, and that the payday loan company will still just take all the money anyway via the continuous payment authority?

 

What a nightmare. I don't know how to convince my bank to stick to the law / their own terms.

 

And I also really don't understand how anyone ever defaults on a payday loan! This seems to be a watertight way for payday lenders to raid your account, even if it is empty....

[asmilecostsnothing]

'Blocking' debit card is awful - it doesn't allow any transactions out

 

This when having a basic account comes in best, really I just think current accounts are set for this type of misery and hardship

I've had basic accounts for a couple of years now and it only allows out what you have in there as cleared funds

http://moneyfacts.co.uk/compare/banking/basic-bank-accounts/

 

Many of the basic accounts give free weekly text messages on balances automatically, in the payday loan default situation I found change of bank was the most appropriate solution

 

There are letters that can be found on the forum that will now help you revoke permission for banks to allow payments out, could give that a whirl

[DarrenAs]

Hi - thanks. I have tried everything with my bank to cancel these payments - they refuse. They say they are normal card payments, not CPAs. And I can't close the account in time.

 

I give up. Don't know what to do. If I empty my account to try and stop the loan company taking payment, and so the bank blocks the payment, won't the bank then charge me £20 for a failed transaction?

 

And if the payday company keeps trying to take payments all morning, as they often do, isn't that £20 for every failed transaction?

 

argh

[Ell-enn]

Have you sent a letter to the bank telling them not to make payments to that company ? they must follow your instructions