What is a Continuous Payment Authority?
What exactly are continuous payment transactions, otherwise known as a continuous payment authority (CPA)? Payday Bad Credit provides you with an overview of everything you need to know about continuous payment authorities (also known as recurrent payments), what they mean and what you can do if you have a CPA.

What is a continuous payment authority?

A CPA is when you have given a business permission to take money out on a weekly or monthly basis from your debit or credit card, whenever they believe that they are owed money by you. The sorts of businesses who use recurrent payment transactions include
  • Online DVD rental subscriptions
  • Magazine subscriptions
  • Porn websites
  • Overseas newspaper subscriptions
  • Mobile phone subscriptions
  • Cable TV subscriptions
  • Gym memberships
Continous payment authorities work differently to direct debits, they may seem almost identical but they aren’t. It is very important to find out whether you have a CPA on your account and whether they should be cancelled or switched to a direct debit. Until 2009, it wasn’t possible for you to cancel a CPA,  only the company was able to. However, regulations have now changed.

How do I know if I have a continuous payment authority?

One of the main ways of finding out if you have a CPA or recurring payment on your account is if the business asks for your long number across the credit or debit card you own, as opposed to your sort code and bank account number. Other than this, it can be quite difficult to detect continuous payment authorities by simply looking at your bank statements. It can sometimes take a few months to be able to detect repeat patterns on your account. On your debit card, you can check to see what payments are coming out of your bank account that isn’t listed as either standing orders (SO) or direct debits (DD). If you find payments like these, they are most likely to be from continuous payment authorities. For credit card accounts you have, any regular payment from this account is by definition a CPA.

How do I cancel a continuous payment authority?

If you find a recurring payment coming out of your debit or credit card account that you wish to cancel, you should contact the business directly in order to cancel the arrangement. It is also worth contacting your bank to verify that any further payments should not be taken out of your account. It is important to note that you have a legal right to cancelling a CPA, even if a company tries to refuse you, and banks have a legal obligation to ensure they are cancelled on your behalf should complications arise. This is regulated by the Financial Conduct Authority, who also stated as a regulation that banks must refund any money taken from bank accounts of customers who have clearly stated their desire to cancel a continuous payment transaction. If you find that the bank does not take the necessary action to cancel a CPA, you can complain to the Financial Ombudsman, which is a free impartial service that aims at settling disputes between financial companies and individuals. You can make a complaint online or by post. The Ombudsman can help decide on the level of redress you should receive (if any at all). However, if you do decide to make a complaint to the Ombudsman, it is important to remember your application will only be considered if you have already tried to contact and settle the complaint yourself with the bank, and you have given the bank eight weeks to respond.

How to avoid continuous payment authorities in the future

CPAs can end up being stressful to organise or amend if the company isn’t legitimate. Here are three ways you can avoid the hassle involved with some CPAs:
  • Making manual payments each month, or creating a standing order can be a safer alternative to having a CPA
  • Switching to direct debits, if the company accepts them should be your number one go-to alternative. A direct debit provides you protection should something go wrong, meaning the bank will have to refund you with immediate effect if an erroneous payment is made
  • Using a prepaid card is another option that you may decide to go for instead of choosing a CPA. With a prepaid card, it acts as a pay as you go card, meaning that you require no credit check and crucially, you can’t spend more than is available on the card itself. This may be a safer way to have a CPA on your accounts if you are unable to sort out an alternative, especially for companies you may be less sure about.

Daniel is a loans expert based in London and has been working in the payday loans industry since 2010.