Continuous Payment Authorities - Dom's top tips
The One Show has received a number of emails from viewers about Continuous Payments Authorities.
Dom Littlewood met one viewer who was tempted by a 'free' trial and gave her credit card details for postage and packaging costs. But the company started taking money out of her account via a Continuous Payment Authority even though she didn't realise she had authorised it.
However, she now realises it was stated in the terms and conditions that she would have a certain amount debited from her account every month.
Continuous Payment Authorities are used by legitimate companies successfully and customers can cancel them easily if they want to. They can be a problem in this kind of case because the companies can be difficult to get hold of.
What is a Continuous Payment Authority?
It can be set up using plastic cards, both credit and debit cards can be used. It's similar to direct debit because payments are taken from the account which is linked to the card and the company has control over how much is debited and when.
However, the difference is that a Continuous Payment Authority is not covered by any bank guarantee and can only be cancelled directly with the business that holds the authority. These payments are often set up over the phone or on the internet so there often is no paper record of what was agreed if a dispute later arises.
Always read the terms and conditions when signing up for anything, especially a 'free' trial where you are giving credit or debit card details.
How do I cancel a Continuous Payment Authority?
You must contact the company to cancel a continuous payment agreement.
Banks can step in and help. It is important customers get in touch with them quickly. They do have to help if a company breaks the terms of the contract, say if the company stops delivering the product or service.
Dom's top tips
- Always read the terms and conditions when signing up for anything.
- Be wary of free offers, it could be too good to be true.
- Make sure there is a contact number for the company you have set up a continuous payment with in case you need to cancel it.
- Financial Ombudsman - How to complain
Have you been out of pocket beccause of a 'continuous payment'? Share your stories here.
February is the Office of Fair Trading's Scam Awareness Month.
- Dom's tips for staying safe from auction site scams
- Direct Gov: How to protect yourself from financial scams
- Consumer Direct: Common scams
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