stopping payday loan company emptying account

dadooronronrondadooronron

Hello. I have had experience in the past with payday loan companies but luckily am able to stay clear now. However in recent weeks I have been helping my sister to sort out a situatuon with her mortgage - she has got into arrrears - and threatened with possession - luckily she has now agreed payment agreement with lender. They are going for suspended possession order - but as long as she makes her payments she will be ok. Clearly this is her priority.

During the last couple of weeks she has opened up a lot about her finances and she has two payday loans which would have been due for paying on 20th of April - but because of good friday she will be paid earlier and the payday people know this - so they plan to take their payment on 17th. She can't afford it and has written to them explaining her situation and offering token payments of £10 while she works out her finances with CAB. She hasn't heard back and when she phoned one of them she said they just said they would be attempting to take the money - but then offered her a deferral with , of course, extra charges. Now - I seem to recall reading something about new regulations coming in recently - can she stop these payments with the bank? Any help appreciated. She doesnt want to wake up and find her bank cleared out next week. she would still have enough to cover mortgage but I am guessing food etc might then be an issue. any advice appreciated.

DanFish

Get her to cancel her debit card and stop all Continous Payment Authorities from her bank account. They will then not be able to take any money and she should then make the £10 token payments while negotiating a repayment plan.

dadooronronrondadooronron

thanks. I will tell her that. Do you know if it should definitely work. Ihave heard horror stories of them emptying bank avcounts

stclair

DanFish wrote: »

Get her to cancel her debit card and stop all Continous Payment Authorities from her bank account. They will then not be able to take any money and she should then make the £10 token payments while negotiating a repayment plan.

Cancelling the existing debit card will not work they can still take funds using the old debit card when a new one has been issued.

National_Debtline

Hello there,

The continuous payment authority is the permission that has been given for the payday loan firm to use the debit card to take money out of the bank account. You can cancel this authority by contacting either the lender or the bank - or both. This needs to be in writing. Once you have removed the authority the lender will not be able to try and take payment. If they were to try, you should consider a formal complaint - to the lender first and then ultimately to the Financial Ombudsman Service.

We've a useful fact sheet covering payday loans, you can find it by clicking HERE

Best wishes,

David @natdebtline

stclair

dadooronronrondadooronron wrote: »

thanks. I will tell her that. Do you know if it should definitely work. Ihave heard horror stories of them emptying bank avcounts

You need to contact your bank and ask then to cancel the card payment authority and request them to refund any funds which have been collected. You also need to contact the company involved to request a cancellation and come to agreement to repay them.

DanFish

stclair wrote: »

Cancelling the existing debit card will not work they can still take funds using the old debit card when a new one has been issued.

Really? How? i thought if you report it lost or stolen and cancel the CPA then they cant withdraw anything.

Apologies to the OP if this is case i have been ill informed previously.

Growurown

DanFish wrote: »

Really? How? i thought if you report it lost or stolen and cancel the CPA then they cant withdraw anything.

Apologies to the OP if this is case i have been ill informed previously.

Even if you cancel the card they can still take money out against that card because you have signed the CPA. This happened to a friend of mine. She cancelled her card and got a new one but they still were able to take payment and basically emptied her account of all her two week's worth of benefit money leaving her penniless. It's the CPA that needs to be cancelled.

[Deleted User]

stclair wrote: »

You need to contact your bank and ask then to cancel the card payment authority

Correction, you TELL them to cancel it.

stclair

DanFish wrote: »

Really? How? i thought if you report it lost or stolen and cancel the CPA then they cant withdraw anything.

Apologies to the OP if this is case i have been ill informed previously.

Via the Visa Account Updater (VAU) it enables the electronic exchange of updated account information among participating merchants, acquirers and Visa card issuers.

http://visadps.com/services/visa_account_updater.html

stclair

Bedsit_Bob wrote: »

Correction, you TELL them to cancel it.

As the payment has not left the account yet the CPA may not even be set up or even be visible on the account. The OP may have to wait until the transaction has actually been processed then request the cancellation and refund.