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Ask Justin

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Avoid continuous payment authorities?

Financial Advice | General Helpful? 12

Asked by hdeakin299, submitted 21 October 2012.

Open Quote I feel that there may be a case for banning the use of "Continuous Payment Authorities" in the UK.

They can be subject to aggressive marketing tactics, for instance, when an online, an goods retailer website may offer you a £10 discount if you sign up to an associated discount saver type website to get future discounts on all kinds of goods . But unbeknown to the unsuspecting customer who trusts the retailer, on the associated site, buried away in the small print there will be a trial offer for a limited period and then a deduction of £10 per month for membership of the associated discount website.

If you do not check your emails or your bank statements in detail this can cost a lot .I did not find it when I checked my monthly direct debits and standing orders because it was a Continuous Payment Authority and these are not listed alongside these other payment methods on the banks website I do not like Continuous Payment Authorities and I do not knowingly sign up for them but I got caught nevertheless.
End Quote

Answered by Justin on 22 October 2012

I agree that continuous payment authorities are open to abuse.

Continuous payment authorities (CPAs) are similar to direct debits but apply to debit and credit cards rather than a bank account and, vitally, they are not subject to the protection offered by the direct debit guarantee scheme (which essentially says you must be notified in advance if the amount, date or frequency of a direct debit changes).

Finding out whether you have any set up is really a case of trawling debit/credit card statements for regular payments - far from satisfactory. And, if you have any annual insurance policies that you pay be debit/credit card be especially careful as these are more often than not setup via CPAs.

If you want to cancel a CPA then in theory your bank/credit card company must do so if you ask them (as per the Payment Services Directive). In practice it seems banks are sometimes reticent to do so and there's confusion over whether they're actually obliged to (despite the law...). So the first point of call should perhaps be the company taking the payments - ask them to stop taking payments (although you'll need to fulfil any outstanding payments/obligations as per the contract you agreed to, if relevant). If the company is difficult then ask your bank/credit card company to cancel. And if that fails take your complaint to the Financial Ombudsman Service (FOS), although even they appear to have a chequered history of upholding CPA complaints - all in all the whole thing seems rather a mess.

Best to avoid CPAs in the first place wherever possible - companies offering free trials etc that require you to provide your credit card details will almost certainly be entering you into a CPA. And, if you have some, watch your debit/credit card statements like a hawk to ensure the company only takes what's owed.

Please note this answer does not constitute a recommendation or financial advice and should not be relied upon when making specific investment or other financial decisions. You should always undertake your own research into whether a product or service is appropriate for your needs and, if necessary, use a qualified professional adviser.

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Readers' Comments (3) - To post a comment please register or login .

Comment by hdeakin299 at 8:13pm on 22 Oct 2012:

I checked the parent company (of the company that did the CPA to me) out on Wikipedia and apparently the parent company has been " investigated by the United States Senate Committee on Commerce , Science and Transportation for what senators said are fraudulent business practices , whereby consumers are enrolled in a "membership rewards" or "loyalty"club , often without their knowledge , after having purchased something through a separate website"

This is exactly what happened to me . The primary website where I was buying the goods from was one with a high street presence ( of the type where you fill out a chit from the catalogue and present it at the counter) and I will not be shopping there in future as it was their site that allowed this to happen.

As it was back in January when I purchased the item a considerable financial loss has been incurred . I cannot remember whether I gave my debit card details to the 2nd company but I certainly did not give a knowing consent to a CPA . There were loads of complaints on the web about this such as "I am extremely frustrated ,irritated and upset that your company is taking money from my account without my consent on a regular basis"

It is the lack of consent that is the key issue . Wikipedia says :- these companies "used aggressive sales tactics to enroll online consumers in services without their consent".

Comment by DaveK at 11:05pm on 09 Nov 2012:

You are no doubt referring to Webloyalty, UK Company Reg: 05922626 trading as Shoppers Discounts and Rewards.
Tons of stuff on the web about their corrupt practices. I almost fell for it when making a purchase by PayPal. The trader on eBay had no knowledge of them which is odd as they are usually in league with 'affiliate' companies.
They run their own 'Get Satisfaction' forum which has the appearance of a social discussion group, but you only realise they control it when your adverse comments are quickly removed. Very smarmy responses to complaints and they always cancel the 'membership' and refund money to those who discover they've been duped. The thousands who don't check their bank statements properly don't notice the £10 'continuous payment' being taken every month. After investigation by a US Senate committee the law was changed so what they continue to do here is illegal there. The response I got when challenging them was that they can do it because UK law is different. Their MO is to popup a £10 voucher off your next purchase when buying online from 'affiliated' companies such as B&Q, easyJet, Trainline and Interflora. Many have since disassociated themselves following numerous complaints. Click on the voucher offer and your bank/credit card details are then passed to Shoppers Discounts&Rewards. You're a member at £10 a month and never felt a thing. They tell complainers that they must have completed an online application form and responded to several emails-which must have got lost in the post. They won't tell me which companies are affiliated or how many 'members' have received benefits in excess of the £120 a year they charge. I'm not a victim but sympathise with those who are and will continue to broadcast their corrupt activities wherever I can.

Comment by hdeakin299 at 11:44am on 13 May 2013:

Another instance where CPAs can be a pain . A family member was in Japan as a student . The student accommodation where he was living was visited by the Japanese equivalent of the "BBC licensing authority" and this official said that a TV licence was needed and my relative therefore had to sign up to the Japanese TV licence with CPA as he was unsure of the legal position for UK students using Japanses TV in student accommodation : in fact all the Japanese students manage to avoid this charge as the legal requirements in actual practice were not as onerous as presented by the TV official . Back in England we found that attempts to cancel the CPA fell on deaf ears : language was one problem and a lack of willingness to cancel by the TV authority was another . It just carried on being paid . It took several letters to the TV authority , and several accompanied visits to the bank to make any progress . Eventually The bank insisted on additional cancellation letters being sent giving a set termination date . Then after furthers visits the CPA was eventually cancelled but this was only after several months of unnecessary payments to the Japanese TV authority had been made.

Also I read in a paper about how 3 Million USA citizens are trapped by CPAs that they cannot cancel or get rid of . Many of these apparently had signed up to "Porn sites" . When they tried to cancel they found that there attempts at cancellation were defeated by the porn providers . These companies HQ addresses ( to write to to cancel( were often incorrect or non existent and the men involved wereoften too embarrassed to take the matter further.

Loads of American web sites operating in Britain use CPAs and many British sites now appear to using CPAs as though they were the norm. This is one area where the "Atlantic Bridge" needs several coats of "anti rust" treatment :it is one American import that we could have done without.