Regular Payments off a Credit Card Discussion

Bram_Swinnerton

Did you know?

Authorising a regular payment off a credit card known as a ‘Continuous Payment Authority’ is much more dangerous a bank account ‘direct debit’. !The problem is you can’t cancel it, only the company its set up with can. !

The major, but not exclusive, culprit of such dodgy dealings are internet !!!!!! sites leaving people taking !‘embarassed’ monthly payments. !Always make sure any CPA is set up with a legit company, and try to use direct debts not credit cards. !I once reported on this for Moneybox, read a report based on that here

To discuss this click reply


Insert of clarification: !Thought i should say, a CPA (also called a recurring transaction) applies if you do it off a debit as well as credit card. !You need to do a Direct Debit off your bank account, not a regular debit off any plastic.

the_squirrel

Thanks for this very useful info.

daveybee_2

Hi All
Long time reader, first time poster.

Quick question, does the service provider have a legal obligation to let you know an annual payment is coming. to my horror it's in the Ts&Cs (which okay I should have read) but it seems a disgrace not to give you notice. Also I went over my overdraft which is very upsetting.

Any advice appreciated.

All best
Davey

Paul_Herring

daveybee wrote: »

Hi All
Long time reader, first time poster.

Quick question, does the service provider have a legal obligation to let you know an annual payment is coming. to my horror it's in the Ts&Cs (which okay I should have read) but it seems a disgrace not to give you notice. Also I went over my overdraft which is very upsetting.

Any advice appreciated.

All best
Davey

They usually give you about a year's notice - should be enough for anyone

smurph_3

I have a tesco cc. I have just discovered a cpa I had not authorised on my credit card. Tesco have stopped this but say that they can't recover the money stolen and also can't tell me who has been taking the money - it's noted as Netbanx-Bonefish.
Is this right? Surely they can trace who the payments are going to, and as I never authorised it in the first place, surely that is theft?

Animal_Flower

Quick question for anyone who may know...

I have an Egg CC and a Virgin CC with a balance on both. They are both out of their interest free period now and I can't apply for another one to transfer the balances to as I am no longer working.

Balance on both is around the 3k mark and I have been steadily paying them off with a view to be CC debt free by 2011

Now I can save interest on one by transferring the amount to the other and getting interest free on the balance transfer, thus saving one lot of interest.

Any ideas which way round it is best to do it?

Egg to Virgin or Virgin to Egg?

Thanks

nottmreds

I called MBNA on 11/05/10 to CLOSE an account with them that had not been used for nearly a year. This was processed with no problems - apparently!

I have received a text from them this morning regarding a refused payment on the account.:eek:
It turns out that I have a recurring yearly payment with the AA that MBNA processed after the account had been CLOSED.
MBNA have since charged me for 2 missed monthly payments and returned unpaid payment request.
I called in to complain and apparently their T & C's state that the cancelling of any reqular subscription is MY responsibility and they will honour it even if the account is closed!

HOW CAN THIS BE RIGHT???

Paul_Herring

nottmreds wrote:

HOW CAN THIS BE RIGHT???

Because

1) You had a Regular Payment which you agreed to, and you didn't cancel, on the card
2) MBNA have no right to refuse a Regular Payment on your behalf - they must honor it. It's not like a DD or SO where they have discretion.
3) Your card isn't actually 'closed' for at least 13 months after request due to exactly this sort of situation.

Closing a credit card is no protection against Recurring Payments - you MUST cancel them YOURSELF - you cannot rely on the credit card provider to do this for you by proxy - they cannot by law.

nottmreds

Paul, thanks for the prompt reply.

I'm absolutely stunned that closing an account (and having it confirmed as closed) doesn't actually close it and prevent people taking money from it!?!?
This just does not make any sense.

Paul_Herring

This just does not make any sense.

Regular Payments are the exception.

Until a few years ago, there were abused by very few companies - AOL being one of the major culprits.

It's only recently that other companies such as Car Insurance and Car Breakdown services have been 'abusing' it.

The thing that's drawn it to peoples attention is that:
1) Premiums are yearly, not monthly as they were with AOL, so the fact it's a Regular Payment is not apparent until the next year's premiums are collected
2) It's not made at all clear on most documentation that you are consenting to a Regular Payment being set up, as opposed to a single one-off payment.

You may notice, for example, that Insurance Renewal letters are carefully worded to say that "unless you tell us otherwise we will [charge your card] for the renewal fee."

What happens is people look elsewhere, get a better deal, throw the renewal form away, don't "tell them otherwise," then not only get charged by the new company, but also the old one.

What needs to happen is that recurring payments longer than (say) 2 months apart should not be allowed; but given the lax attitude to setting off recently proposed, I wouldn't hold your breath.