Direct debit guarantee for credit cards

YorkshireBoy

Just out of interest, because most of the problems here seem to stem from annual insurance type product renewals, I wonder if CPA's 'lapse' like DD's do after a 13 month/400 day period of inactivity?

And if they don't, should they?

MarkyMarkD

I have never heard that they do, but I can't definitely confirm that they don't.

It's certainly quite a good idea.

Alfie_E

MarkyMarkD wrote: »

Just because the DD guarantee is a cushy deal for the consumer doesn't mean it applies to any other circumstance.

The situation is quite farcical, especially in relation to debit cards. If a company takes money wrongly from my bank account using a direct debit, I can have the transaction reversed. If the company truly believes I owe them the money and I refuse to give it to them, they can take me to court to get it. Big company, little consumer, shouldn’t be a problem for them. However, if the company takes money wrongly from the same bank account but this time using a debit card CPA, I have no right to have the transaction reversed. If I want my money back and the company doesn’t want to return it, now I, little consumer, have to take them, big company, to court.

It’s not just annual renewals that are the problem. Every so often someone will write something similar to the following, on this forum.

I cancelled my BigISP broadband ten months ago, but BigISP keep taking £12 each month. I’ve spoken with my bank, and they say they can’t do anything and I need to sort it out with BigISP. Each month, I ring up BigISP and they promise they’ll sort it out, but the following month they just take the money again. BigISP have £120 of my money, and I want it back.

MarkyMarkD

Whilst you can't cancel a CPA by asking your bank to do it, you can (and should) dispute any card transaction which is unauthorised.

If you have told your supplier to stop taking money from your card, and they continue to do so, your bank should pursue the supplier for this disputed transaction on your behalf - do a chargeback.

Alfie_E

But, it is authorised. That’s what the A in CPA is for. I believe you can’t do a regular chargeback. Even once you provided evidence that you’ve served notice on the company to end the authority, it can take some time to stop further payments. That doesn’t get back payments already taken, or help in the situation where a payment is due but the amount taken is wrong. A CPA would normally allow the company to vary the amount and the frequency of payments.

borosteve_2

When I cancelled my barclaycard they told me to make sure that I cancelled my CPA's. I said as far as I was aware I didn't have any and asked them to just confirm this. They said they could'nt
I didn't have any but if I had set one up at the beginning of my credit card account and forgotten how the hell would I ever find out til it was too late?

dealer_wins

Reading this thread there is no way anyone should ever sign up to a CPA. Any problems and your stuffed good and proper!!! I will advise my friends and family to avoid this payment method at all costs as from now.

I still dont get it though, supposing a CPA payment was presented for £50000, would it still be honoured as the card company cannot return these?

Alfie_E

borosteve wrote: »

They said they could'nt

That’s true.

Direct debits have a definite start and a definite end. They’re set up. Payments are taken. They end when you or the company explicitly cancel them, they remain unused for thirteen months or you close the account.

CPAs are much less formal. They start when you make the agreement the company, whether that’s signing a form or agreeing in a telephone conversation. They end when the company agrees that you have served notice on them to stop. The only time a bank is aware of them is when payment requests turn up that have been put into the system described as recurring transactions.

King_Of_Fools

dealer_wins wrote: »

Reading this thread there is no way anyone should ever sign up to a CPA. Any problems and your stuffed good and proper!!! I will advise my friends and family to avoid this payment method at all costs as from now.

Indeed, I would avoid them at all costs.

dealer_wins wrote: »

I still dont get it though, supposing a CPA payment was presented for £50000, would it still be honoured as the card company cannot return these?

They would not be able to take an amount greater than your credit limit and as CPAs are usually for some type of service there would be very little likelihood that this amount could be valid.

dealer_wins

King_Of_Fools wrote: »

Indeed, I would avoid them at all costs.


They would not be able to take an amount greater than your credit limit and as CPAs are usually for some type of service there would be very little likelihood that this amount could be valid.

See this is what I cant understand.

They can refuse payments in some cases, yet they will still let payments go out of a closed account with a limit of zero. Makes no sense to me at all.