Continuous card payments have become notorious for being difficult to cancel. But thankfully, the Financial Conduct Authority has stepped in to make sure this is no longer the case.
Continuous payment authorities (CPAs), also known as recurring card payments, allow regular payments to be taken from peoples’ debit or credit cards.
Each year, payments of more than £7.5bn are made through CPAs, with each transaction worth £45 on average. So if you’ve ever taken out a gym membership for example, it’s likely you’ll have set up a CPA.
And while recurring payments are relatively simple to set up, some Which? Convo commenters have told us they’ve found them a bit tricky to cancel.
The Financial Conduct Authority (FCA) has been looking into how easy it is for customers to cancel continuous payment authorities. So far, it’s found that some banks are failing to cancel CPAs following customer requests, despite the fact that the banks are obliged to do so.
We carried out our own research, making 60 calls to banks and credit card providers to test their staff’s knowledge of the rules surrounding recurring card payments. Unfortunately, in two thirds of cases, the advice given was incorrect. Callers were often wrongly told they’d need to cancel the CPA with the service provider.
Following the FCA review, the largest high street banks and mutuals have agreed that they will always cancel a recurring card payment following a customer request. This means that customers so no longer be asked to contact the original merchants.
Compensation for non-cancellation
But what about those who have been let down by cancellation problems in the past? There’s good news on that front too: the FCA has announced that around 30,000 customers who lost out because of a bank failing to cancel a recurring card payment are eligible for compensation.
This applies to all complaints made since November 2009, so if you’ve lost out during this time but didn’t complain, now’s the time to do so.
Have you experienced problems cancelling a CPA in the past? Will you be submitting a complaint to claim compensation?