Cancelled CC and recurring payments

Groundwork_2

I cancelled a credit card with Lloyds TSB assuming that an annual payment to the AA would also cancel as I didn't need it any more.

Imagine my surprise when a credit card statement came with an amount owing to the AA. I rang up the call centre who told me that if there was a recurring payment on a credit card it could be claimed and the account reopened without any recourse back to me.

Does anyone know the legality of this? Are credit card payments covered the same way as direct debits?

Groundwork_2

Just found another article which answers my questions!

rsykes2000

Fully legal. I think it's known as a 'Continuous payment authority' or something similar, and yes, it can be debited to cancelled cards - the person who wants the money (in your case the AA) has to specifically cancel the authority on your instruction, just cancelling the card does not cancel these. They are nothing like Direct Debits - the bank has no mandate to sort them if things go wrong or are not cancelled, it is entirely your responsibility to comntact the company and get it cancelled.

Wirenth

Unfortunately, it is very easy to mistake a CCA for a direct debit. You fill in a form to debit your account for what you think is a one-off payment. Nowhere does it say on there that it is a CCA. We've fallen foul of this with Johnson, the drycleaners. There was a random payment taken out of the account which we couldn't account for. We then found out that the a Johnson membership fee was responsible and that no renewal form had been sent through, just that the account was debited by the renewal amount.

I think that it should be a legal requirement on all of these forms as to what kind of transaction they are - a one-off debit, a direct debit or a CAA. Personally, I feel that companies are misusing these forms, leading people to believe that they are OoD/DDs, when they are not.

King_Of_Fools

It is easy to distinguish:
For a Direct Debit you have to give your account details (sort-code and number).
For a CPA you give your card details.