MSE News: Banks 'give bad advice' over card payment cancellations

Former_MSE_Helen

This is the discussion thread for the following MSE News Story:

"Some bank staff wrongly tell customers that regular card payments can't be cancelled, says Consumer Focus"

Read the full story:
Banks 'give bad advice' over card payment cancellations

corbyboy

That's news to me. I was under the impression that banks cannot stop CPAs.

Isn't this why we have lots of people posting here saying that payday loan companies have cleared out their bank accounts?

Tirian

Not a particular surprise to hear this. My wife phoned Halifax last week. SHe spoke to two separate customer service advisers, and neither of them knew what the transaction codes next to items on the statement stood for (i.e. FPO for Faster Payment Outgoing, DD for Direct Debit, SO for Standing Order etc)

Not only that, but they both told her adamantly that the bank could not cancel a direct debit on her account - and that she would have to do that by contacting the organisation being paid!

Even when I told her to refer them to the Direct Debit guarantee information on the APACS / BACS website, they got confused and tried to tell her that she was wrong "because BACS is a different thing".

So yes, if the phone staff don't even understand the basics of the direct debit system and what BACS actually is, which have been around for decades, then I'm not in the least bit surprised that they're not up to date with changes in policy on CPAs that took place a mere two or three years ago ...

SnowMan

corbyboy wrote: »

That's news to me. I was under the impression that banks cannot stop CPAs.

I was under the impression (as I suspect were others) that you couldn't cancel CPAs unless you had contacted the retailer first and then went to the bank.

What the clarifications at the weekend (on moneybox etc) and in this news item (and see the end of this thread) seem to be saying is that since November 2009, you could go direct to the bank first to get the CPA stopped (?)

While you can go to the bank first it would make sense in most cases also to contact the retailer albeit there is no requirement to do so. And if you are contractually obliged to pay the amounts to the retailer of course the company can take action for breach of contract if you stop the CPA (assuming that any contract term is not an 'unfair term').

That is my current understanding but if I'm wrong please post.

fermi

Very revealing section in R4 Moneybox from Saturday,

iPlayer --> http://www.bbc.co.uk/iplayer/episode/b01gng5g/Money_Box_28_04_2012/

Readable transcript here: http://news.bbc.co.uk/1/shared/spl/hi/programmes/money_box/transcripts/money_box_28_april_12.pdf

fermi

The FSA ruling as explained for consumers.

http://www.fsa.gov.uk/consumerinformation/product_news/banking/know_your_rights/payments

Cancelling a regular card payment

When you give your credit or debit card details to a company and authorise them to take regular payments from your account, such as for a gym membership or magazine subscription, it is known as a ‘recurring transaction’ or ‘continuous payment authority’.

These are often confused with direct debits, but do not offer the same guarantee if the amount or date of the payment changes.

In most cases, regular payments can be cancelled by telling the company taking the payments.

However, you have the right to cancel them directly with your bank or card issuer by telling it that you have stopped permission for the payments.

Your bank or card issuer must then stop them – it has no right to insist that you agree this first with the company taking the payments.

Be aware though that you will still be responsible for paying any money that you owe.

SnowTiger

corbyboy wrote: »

That's news to me. I was under the impression that banks cannot stop CPAs.

Isn't this why we have lots of people posting here saying that payday loan companies have cleared out their bank accounts?

It's probably news to many bank staff too. I highlighted it a few weeks ago.

Compensation and refunds on their way to customers who have been given the wrong advice by banks who have refused to stop CPAs I wonder?

Of course those who thought they were clever and could avoid paying Wonga, etc, by losing their card will still be out of pocket. :rotfl:

SnowMan

fermi wrote: »

However, you have the right to cancel them directly with your bank or card issuer by telling it that you have stopped permission for the payments.

Your bank or card issuer must then stop them – it has no right to insist that you agree this first with the company taking the payments.

Thanks. I think I get it now. So concentrating on the legal right to take a payment (and ignoring contractual obligations relating to whether the money is owed aside):

That suggests if you have an ongoing subscription you can't ring the bank first to cancel the CPA. If you did it this way round you would be unable to tell the bank that 'you have stopped permission'.

In that case you have to ring the retailer first to cancel the CPA and if they refuse (or agree) you then ring the bank to cancel the CPA which they must do.

If you have a contract with a retailer where no further contractual payments are due, but you are worried that a CPA remains on the account and the retailer may take a payment anyway then you can just contact the bank first presumably (?).

fermi

SnowMan wrote: »

Thanks. I think I get it now.

That suggests if you have an ongoing subscription you can't ring the bank first to cancel and then ring the retailer to cancel. If you did it this way round you would be unable to tell the bank that 'you have stopped permission'.

In that case you have to ring the retailer first to cancel and if they refuse (or agree) you then ring the bank to cancel the CPA which they must do.

There is nothing in the The Payment Services Regulations 2009 that says you have to inform the payee first.

According to those you have a unilateral right to withdraw consent to a CPA regardless, which the bank/payment service provider is obliged to action.

Having it any other way would also be counter-intuitive, and prone to abuse, argument, confusion. After all, the bank is not an arbiter of any dispute over whether you spoke to the payee or not? You can imagine the "I told them" vs "they did not tell us" accusations and claims going back and forth if it was any other way. Would make a mockery of giving the consumer cancellation rights.

Consumerist

fermi wrote: »

There is nothing in the The Payment Services Regulations 2009 that says you have to inform the payee first.

To be more specific, <Regulation 55> applies

PSR 2009 Part 6 Regulation 55(4)
(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.

Edt
Sections 67(3) to (5) give windows within which you cannot withdraw consent. At any other time, Regulation 55(4) applies.

Consumerist

SnowMan wrote: »

That suggests if you have an ongoing subscription you can't ring the bank first to cancel the CPA. If you did it this way round you would be unable to tell the bank that 'you have stopped permission'.

I would say Regulation 55 applies (at any time) anyway.