Continuous payments authority: know your rights

If you've authorised companies to take cash out of your bank account on a regular basis don't believe anyone who says you can't cancel, writes Rupert Jones

Rupert Jones
The Guardian, Friday 24 February 2012 23.01 GMT

The AA says it will sort out the problem if continuous payments are taken against a member's wishes. Photograph: Barry Batchelor/Press Association

Banks, financial websites and even government departments are giving consumers incorrect information about their rights when it comes to cancelling regular card payments, Guardian Money can reveal.

Millions of people have set up regular automatic payments to pay for things such as breakdown cover, travel insurance, gym membership or a magazine subscription. Some will be direct debits and standing orders, but others will be "continuous payment authorities" (also called recurring payment authorities, recurring transactions or recurring payments). These are payments set up using a debit or credit card. By signing up, you authorise the company to take payments and the money is collected from your card.

Money last week told how thousands of women appear to have been taken in by a "free" face cream trial that has locked them into £60-£70 monthly recurring payments applied to their credit or debit card. It has emerged that many organisations are telling people continuous payment authorities can only be cancelled by the retailer or business – and that neither you, nor your bank or card company, has any power to stop the payments.

But that is wrong. In fact, you can go direct to your bank/card company and ask them to cancel the payments. The Financial Services Authority recently updated its consumer advice to make this clear (see right). It says: "Your bank or card issuer must then stop them – it has no right to insist you agree this first with the company taking the payments."

The situation is not helped by other government departments, such as the Office of Fair Trading, putting out incorrect information. The OFT recently stated that a consumer who wants to cancel a continuous payment authority "must" first contact the business taking the payments, prompting criticism from two debt charities, the Consumer Credit Counselling Service (CCCS) and the Money Advice Trust. The CCCS said this wording needed to be rewritten because it may give firms the wrong impression that people have no automatic right to cancel.

Theres many a way of getting round clauses.
The best one is to say you lost your card or had it stolen.

Et voila, they're fucked.