Recurring Payments Warning! discussion

dprice1164

Despite cancelling my AA recovery membership and specifically asking them to cancel the recurring payment, the AA still took £112 from my current account as membership renewal.

It's a rediculous facility that the banks are giving these companies and without any redress when things go wrong.

savagej

Sorry but you are wrong.

Here is a link to a booklet issued by the FSA :

http://www.fsa.gov.uk/static/pubs/consumer_info/know_your_rights_guide.pdf

you want to read pages 12-15, the issue of card recurring payments is dealt with on page 15.

Plus it is not an issue of a charge back it is an issue of UK law and withdrawing consent to take money from your account, the bank cannot superceed the law with Visa/Mastercard chargeback rules.

If you don't beleive me I can provide a link to the relevant Act of Parliament for you to read, but I hope you have been enlightened by the FSA.

savagej

dprice1164 wrote: »

Despite cancelling my AA recovery membership and specifically asking them to cancel the recurring payment, the AA still took £112 from my current account as membership renewal.

It's a rediculous facility that the banks are giving these companies and without any redress when things go wrong.

You need to tell the bank you withdrew consent not the company who are taking the money, the bank is then required to immediately reverse the transaction. If they tell you this is not the case I can give you exact details to quote of the legislation under which they must refund your money.

meer53

Every single day at work, we get dozens of complaints from customers who are being debited by companies with CPA's. Some have cancelled their agreements with the retailers concerned, some haven't. It doesn't really matter to us what the FSA regulations say, We find that the best way to deal with these for our customers is to recommend that they try to cancel the agreement, then we can attempt to retrieve their money for them under Visa regulations. It doesn't matter whether they get confirmation of this or not. The customer is then refunded whilst this is in progress. BUT, the retailer still has the right under Visa Regulations to reject the chargeback.

The Payment Services Directive regulations state that the customer should be refunded for any unauthorised transactions immediately. The problem being with CPA payments, is that they aren't technically unauthorised, as the cardholder has given their card details initially for a purchase.

It's quite a grey area really but most of our customers are more than willing to email or call a company to cancel their agreement. Once thats been done, there's no issue with further transactions. The main problems which crop up on the forum are when people haven't read the T & C's before handing over their card number.

savagej

I am sure you agree though that what is stated in the FSA booklet is not ambiguous and consent can be withdrawn at anytime. As you stated they "aren't technically unauthorised", and you are right until the point the customer decides otherwise and that is all that is takes. If someone pushes the matter with the bank they will have to reverse the transaction, the problem then lies with the bank, it is not up to the customer to worry about the outcome of a chargeback. The customer withdraws consent and therefore authorisation is no longer in place and a bank must stop a company from taking anymore money.

I have a feeling that banks simply don't like this are they are the ones who can lose out because of the Visa/Mastercard rules and so they pretend not to know or teach their staff about the legislation, in the hope a customer can be fobbed off with "it is not our problem".

I will quote the regulations if you like and you will see it is very explicit but the FSA booklet make it clear too.

Edit: this is the extract from the Act

"55.—(1) A payment transaction is to be regarded as having been authorised by the payer for the purposes of this Part only if the payer has given its consent to—

(a)the execution of the payment transaction; or .
(b)the execution of a series of payment transactions of which that payment transaction forms part. .
(2) Such consent—

(a)may be given before or, if agreed between the payer and its payment service provider, after the execution of the payment transaction; and .
(b)must be given in the form, and in accordance with the procedure, agreed between the payer and its payment service provider. .
(3) The payer may withdraw its consent to a payment transaction at any time before the point at which the payment order can no longer be revoked under regulation 67.

(4) Subject to regulation 67(3) to (5), the payer may withdraw its consent to the execution of a series of payment transactions at any time with the effect that any future payment transactions are not regarded as authorised for the purposes of this Part."

These superceed the T&C's and does not mean the money is no longer owed to whoever the CPA was set-up with in the first place but that is their problem, it is not the customers problem but one for the bank.

meer53

savagej wrote: »

I am sure you agree though that what is stated in the FSA booklet is not ambiguous and consent can be withdrawn at anytime. As you stated they "aren't technically unauthorised", and you are right until the point the customer decides otherwise and that is all that is takes. If someone pushes the matter with the bank they will have to reverse the transaction, the problem then lies with the bank, it is not up to the customer to worry about the outcome of a chargeback. The customer withdraws consent and therefore authorisation is no longer in place and a bank must stop a company from taking anymore money.

I have a feeling that banks simply don't like this are they are the ones who can lose out because of the Visa/Mastercard rules and so they pretend not to know or teach their staff about the legislation, in the hope a customer can be fobbed off with "it is not our problem".

I will quote the regulations if you like and you will see it is very explicit but the FSA booklet make it clear too.

I agree with what you're saying but it's not quite as clear cut as you think. I can only comment on what happens where i work but from the amount of comments on here about the problems people have i feel that most banks take the same stance.

The fact is that the cardholder has entered into a contract with a retailer to buy goods or services and no bank can cancel that contract.

The banks cannot stop a retailer from debiting a card, all they can do is dispute the transaction once it has debited. This is standard procedure, it's not that bank staff aren't trained, or that they worry they will lose out if the chargeback rejects, it's simply that their hands are tied if the contract hasn't been cancelled by the cardholder. You can't expect retailers to accept cancellation of contracts by a third party can you ?

If a customer "pushes" the issue where i work, we will refund them, action the chargeback but will advise them that if this rejects then they will have to contact the retailer themselves. So yes, we do refund the customer immediately, but that refund is subject to the outcome of the dispute. We cannot stop the debits.

savagej

I do see your point.

I think retailers just have to accept the fact that a CPA can be cancelled by the customer contacting their bank and stating they no longer authorise payment. The company would then have to find some other way of billing the customer for monies owed.

From the law on the matter, I have now learned that a customer must advise the bank in advance that it does not authorise any further transaction of a particular type and as long as the company has not already initiated the transaction then the bank must not allow them to go throught. However, for transaction that have been paid they don't have to be refunded.

So they can be cancelled which I think was the original question just as long as you tell your bank in time.

jalexa

savagej wrote: »

(3) The payer may withdraw its consent to a payment transaction at any time before the point at which the payment order can no longer be revoked under regulation 67.

(4) Subject to regulation 67(3) to (5), the payer may withdraw its consent to the execution of a series of payment transactions at any time with the effect that any future payment transactions are not regarded as authorised for the purposes of this Part."

For completeness, could you post Regulation 67 please.

savagej

"
Revocation of a payment order

67.—(1) Subject to paragraphs (2) to (5), a payment service user may not revoke a payment order after it has been received by the payer’s payment service provider.
(2) In the case of a payment transaction initiated by or through the payee, the payer may not revoke the payment order after transmitting the payment order or giving consent to execute the payment transaction to the payee.
(3) In the case of a direct debit, the payer may not revoke the payment order after the end of the business day preceding the day agreed for debiting the funds.
(4) Where a day is agreed under regulation 65(4), the payment service user may not revoke a payment order after the end of the business day preceding the agreed day.
(5) At any time after the time limits for revocation set out in paragraphs (1) to (4), the payment order may only be revoked if the revocation is—
(a)agreed between the payment service user and its payment service provider; and
(b)in the case of a payment transaction initiated by or through the payee, including in the case of a direct debit, also agreed with the payee.
(6) A framework contract may provide for the payment service provider to charge for revocation under this regulation."


That is where I learned are per my post above that you have until the point where the company ask their merchant bank to take the money to cancel the CPA, if it has been initated or already taken all you can do is stop payments after that.


So the point is obviously to get in early and tell your bank you are revoking your authorisation for a CPA to carry on and this relies on people knowing what a CPA is in the first place and being told when they give their card number that one is being set-up.

Edit: As it goes on to mention 65 (4) I have included that too:-

"(4) Where the payment service user initiating a payment order agrees with its payment service provider that execution of the payment order is to take place—(a)on a specific day;
(b)on the last day of a certain period; or
(c)on the day on which the payer has put funds at the disposal of its payment service provider,
the time of receipt is deemed to be the day so agreed."

I hope all of this helps gets to the bottom of the issue of cancelling a CPA and as meer53 points out it is complicated, but seems to be much more complicated getting the money back after it has been debited from your account and you had no intention of making a payment or knew one could just be debit from your account because you unwitting gave consent.

Hurdler

This has been an interesting debate - I, for one, am pleased that savagej has included the actual text, and I think that the post above adds some useful clarity - at the end of the day if there is a way that people can (try and) cancel their CPAs then that is the original aim of the thread.

For my part, when I decided to ditch Barclaycard (ironically after a dispute but not for a continuous payment) I happened upon this thread and Martin's advice/warnings about CPAs and freaked out!
I have chased down pretty much all of mine and think I have them narrowed down to
Norton Security subs
Eve Online Subs
Sentinal Card Protection Subs

and I am guessing having bought a car and having to arrange insurance for the first time (had a company car all these years!)... I am guessing that Admiral will just ASSUME they can take out the insurance when it is due, so I guess I need to do the comparisons pretty early and inform Admiral of a better rate in good time so I don't get clobbered.

Thanks again for the recent updates and advice from you guys this evening....