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Have you been caught out by recurring credit card payments?

Credit cards

This week, AA customers were up in arms about continuing credit card payments, despite efforts to cancel their memberships. And it’s all down to the old-fashioned way recurring credit card payments work.

Imagine if you wanted to cancel a direct debit, but the only person who could cancel it was the retailer you wanted to stop paying. Sounds ridiculous, right?

Yet this is how the credit card equivalent of a direct debit – the ‘continuous payment authority’ (CPA) – works.

How do you stop the payments?

AA customers have been very vocal on BBC Radio 4’s Money Box programme about the troubles they’ve had with continuing payments, regardless of attempts to cancel their subscriptions.

Thankfully, the AA has said that it will review its procedures, but there are unscrupulous retailers out there who will intentionally ‘ignore’ cancellation requests. You can’t cancel the agreement yourself, nor in theory, can your credit card provider. Only the company that accepts this type of payment can call it off.

Not even cancelling your credit card will stop the payments. Card companies are obliged to make any payments under a CPA, which can be really bad news for consumers.

If you’ve moved house since you cancelled a credit card, chances are you wouldn’t even think to notify the card company of your new address. So if a payment is taken from your old card by a retailer under a CPA, you won’t get a credit card statement and thus won’t know that there’s a bill to be paid. The damage to your credit file could be disastrous.

Companies must use CPAs responsibly

The emails in my inbox suggest that ID fraud insurance contracts are among the most complained-about products as far as continuing payments go. Many consumers signed up and paid for a three-year contract – when this expired, a renewal premium was taken, even where the credit agreement had been cancelled a couple of years earlier.

So what’s the answer? First of all, there is an alternative – the trusty direct debit. Not only do direct debits mean that I’ll never miss paying a bill, I can cancel them at any time to make sure retailers I no longer use don’t take any more cash from my account.

I’m not saying that CPAs, used responsibly, don’t have a role to play. They can be a handy way to pay for regular goods or services without constantly authorising payments. Plus, most reputable retailers will cancel your agreement as soon as you ask them to. Indeed, many Which? subscribers pay with a CPA and we always act promptly to make sure cancellation requests are dealt with swiftly.

Simply bringing CPAs in line with direct debits, by letting consumers cancel their regular payments at any time would, in my view, be a much fairer system.

As it stands, we’re continuing to lose out at the hands of companies that are either unscrupulous, disorganised or both.

CASussex says:
23 January 2013

It’s a con. I had a car insurance policy with Churchill for a few years on auto renew, always meaning to check out the options every renewal, but never getting around to it till last year. Close to the insurance expiry date i emailed Churchill that i was cancelling, found an alternative, took out their policy & then learned a few days later that Churchill had also taken my premium. I was mad, wrote to Churchill and got a full refund eventually. They said they didn’t receive my mail. Strange that they responded from the same address though.
Seems a convenient and useful idea, but not necessarily always the best idea unless you understand it fully.

Emails do go missing and coincidentally, I have just had an example of this. I have no idea how many do go missing but it does happen, which is why confirmation of receipt is essential for anything important. It might also be carelessness or incompetence. 🙂

CASussex – also, you say that you cancelled close to the renewal date. It may have been too close for Churchill to stop the auto renewal, as processing often starts a week or so before the actual renewal date, so that all is in place on expiry of the old policy.

I have just been updating mailing list records as I have a new email address, and some senders warn that I need to allow a fortnight before the new address is used as mailings are prepared in advance.

If you need to change/cancel at the last minute, it is probably better to telephone – and take details of who you spoke to and when.

In my experience, few companies react to a request for an acknowlegement and as Wavechange says, emails do go astray.

Adam Hardy says:
30 March 2013

We just tried to cancel a continuous payment authority to Aviva for an annual car insurance policy with Barclaycard, but we were advised that they are unable to cancel the authority because they have no records of such authorities until such time as a withdrawal is made, and they only keep records of withdrawals going back 6 months.

So it clearly seems that Barclaycard are in direct contravention of the FSA’s guidance/regulations and it is impossible to cancel an annual continuous payment authority 6 months after the last payment was made.

Can’t get any clearer than that!

Shona says:
1 April 2013


You can report them to FSA and threaten to take them to small claims court. That generally seems to work. Barclaycard need your authorization for a continuous payment and you have a right to withdraw that continuous payment authority at anytime. The fact is you have given them notice of this and they should stop the payment.

Chris Middleton says:
18 July 2014

Currys are now starting to use CPA’s for their Computer Cloud Protection Annual Insurance. No problems in previous years when I paid with my Credit Card in the Currys Store ( and they also loaded up the Cloud for me}. However when I took the Laptop in a couple of days ago for it’s annual service and for installation of the next years Cloud Protection, I was advised they could no longer load up the Cloud and I would have to go Online after the Service was completed to get the Cloud installed. Although I had already paid by Credit Card in Store for the Cloud, when after receiving the Laptop back I went Online this evening 18/7/14 it would only install it if I gave all my Credit Card details (including Security Code) for the 12 months Cloud starting the following year in July 2015 !! I will be calling at Currys in the morning to cancel the Cloud and get a refund.

Peter says:
16 August 2015

I’m delighted that Which are against the widespread use of CPA on credit cards. When will Which set a good example with their own inertia sales via the £1 introductory offer which sets up a CPA?

I am against “free trials” or minimal introductory prices that require you to initially enter a CPA. If I want to try something I want to do it with no strings attached. If I like it I’ll decide to continue; if I don’t I’ll want to take no further action. However the scheme Which?, like others, use is a sort of inertia selling; how many forget to cancel in time, or simply shrug shoulders and “may as well continue”. This is very much like energy companies standard tariffs – the most expensive – that many people just don’t bother to switch from, even though they would save a lot of money. Something that Which? condemns. Forked tongue springs to mind? 🙂

Just to clarify my comment. By “Something that Which? condemns” I mean relying on people’s inertia to continue taking money from them – like automatic insurance renewals, energy tariffs, magazine subscriptions.

I joined the RAC in 2004 but 3 years ago, I chose another provider whose product matched my needs for longer periods of overseas breakdown cover. Unbeknown to me I had entered into a CPA with the RAC.

I duly moved house and put in place a mail redirect for 6 months to catch any bills etc that I had maybe missed. Only this year I realised the CPA supposedly in place had meant your company had successfully removed over £250 from my credit card without my knowledge.

The RAC customer care department has eventually responded with a very standardised response that I had only 14 days to cancel membership. The problem is I didn’t know I had RAC membership and indeed I was covered by another organisation. Their argument is I was responsible for notifying them of cancellation or change of address; that would be fine if I knew I had membership

CPAs are a scam and the companies using them know that they increase their profitability . Any ideas on how to force a refund?

The AA are the biggest users of this practice and an absolute disgrace to the industries they operate in. They should be bought to book over it. They took £489 from me this way! Like has already been said, an absolute con and seemingly nothing that can be done!

It needs to be made obligatory that companies that use Annual CPA’s must send out letters by Royal Mail (rather than e-mail) some 3 weeks in advance, so that the charge on the card can be expected. If they do not – then any refund comes out of the CEO’s dividend!

That will be the quick way to ensure compliance.

Andrew — All companies in a contract with their customers must notify any price changes in advance but I don’t see what difference it makes whether the notification is a posted letter or an e-mail message [except that postal delivery will cost the company more and probably feed into higher prices].

Companies must always tell their members or customers when they join or take out a contract if there is a continuing payment authority in place, but it is the customer or member’s responsibility to remember that.

Sometimes there is an option to have or not to have a CPA, but the latter option usually involves adverse terms.

People who wish to review the terms of their contract every year are probably best advised not to enter into a-CPA based contract. Putting the renewal date in the diary a few weeks ahead of when it arises helps with managing such arrangements.