Continuous payment authority

tomduncan · 10 October 2009 at 8:49PM

I paid my car insurance online, using my credit card. As far as I was concerned, it was a one off payment.

Now the documents have turned up, it states that they will take any additional charges using the same payment details.

Wouldn't I need to agree to that before they can do it?

Is there anything I can do to stop this? I am afraid there were enough "surprises" in the package to put me off wanting to use them again (for example they made a mistake in the details and were wanting to charge me £17.50 to correct it).

cooltt · 10 October 2009 at 9:09PM

Continuous payment is in the small print when you first went with them and is legal.
Tell your card issuer your card has been stolen.
New one issued with different expiry date, job done.

[Deleted User] · 10 October 2009 at 9:26PM

Or couldnt you just phone your insurance provider and ask them not to renew the policy?

Moggles_2 · 10 October 2009 at 9:42PM

I would advise you to avoid continuous payment authorities [CPAs] to a credit or debit card, as you will have very little control and your bank has none either. It can cancel a direct debit for you at any time or you can do it yourself via internet or phone banking. However, if you've given a third party (in this case an insurance company) the continuous authority to debit your plastic, they will continue to do so even when a card has been closed/lost/stolen. (As the authorisation took place before the account became compromised, the CPA is assumed to be genuine.)

As the customer, you need to contact the insurance company directly and ask them to cancel the agreement.

tomduncan · 11 October 2009 at 9:00PM

I am, unfortunately, well aware of CPAs and avoid them like the plague. I wouldn't have voluntarily entered into such an agreement.

Are they really allowed to bury such important aspects of the contract down in the small print? I would have thought the CPA should have to be agreed as part of the transaction, not the insurance contract itself - the CC company are not party to the insurance contract.

lisyloo · 11 October 2009 at 10:35PM

Moggles wrote: »

I would advise you to avoid continuous payment authorities [CPAs] to a credit or debit card, as you will have very little control and your bank has none either.

Good advice.
But it's becoming very common in the insurance industry and for some on-line companies you cannot pay by cheque/cash etc. so it's becoming very hard to avoid.

Are they really allowed to bury such important aspects of the contract down in the small print?

It's not as bad as that.
They send you a renewal letter (1 page of A4) which clearly states "WHAT YOU NEED TO DO NEXT" often in bold.
The people who seem to have trouble with this, seem to throw away letters without reading them.

I find it best to be proactie.
I keep any renewal dates in a spreadsheet (everyone must have some sort of system for MOTs, servicing, family birthdays etc. so it's not that hard).
Then I make sure I "lapse" the policy before renewal.
Recorded delivery or getting a written acknowledgement in a good idea because a number of these cancellation instructions do tend to get "lost".
You need to be proactive and careful but it's not hard.
If you can remember family birthdays then you can do it.
If you can avoid it then great, but it's becoming harder to do so.

tomduncan · 12 October 2009 at 11:08AM

The problem with CPAs is not just the automatic renewal. It is also mistakes or disputed payments.

Some time ago I had a CPA for some webspace which I no longer required. I cancelled this, and also cancelled the CC which I no longer used for anything else. The web company continued to charge the cancelled card, the CC company just paid them and chased me for the money. The CC company offered no help whatsoever. It was an error, rather than a scam, but still a real pain to sort out.

In the current case, the insurer messed up some details on the document. Tried to blame me because I had applied online, but there was no way I would have made such a glaring error and not noticed. They agreed not to charge me an admin fee, but if they had charged me there would not have been much I could do to stop them.

This whole thing is far too one sided. I don't know why the CC companies aren't forced to take more responsibility when CPAs go wrong, and provide a guarantee similar to direct debits.

Moggles_2 · 12 October 2009 at 3:30PM

Basically, if you hand over the 16 digit number that adorns your plastic, you're trusting the receiving company not to use CPA to withdraw more funds from that account. Some well known companies have abused this privilege, especially with insurance renewal.

Would you care to name and shame yours?

FYI, and anyone else reading this, the following companies seem rather keen on CPAs, but slow to cancel agreements:

AA subscription, AOL, McAfee, CPP insurance (Identity protection etc), National Homestudy, Natureberry, Norton Anti Virus, RAC, Sky, Virgin Media and Vistaprint, as we forum users have found out the hard way.

Continuous payment authority

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