CPA Refunds and banking with the vulnerable

hardya

The article "Beware recurring payments" indicates that if you attempt to cancel a continuous payment authority (CPA - repeat debit card payments) and are prevented the bank may refund that payment and should prevent or refund all future payments.

My bank indicates that they can only prevent / refund AFTER the actual payment has been taken. Given the nature of pending debit card payments that take an authorization code and delay before taking the actual payment, it is entirely possible that an erroneous payment following a prevented cancellation may impact your available balance for an extended period while you wait for the bank to refund and in the same way any subsequent erroneous repeat payments may affect your available balance for a period of time.

Does anyone know if the banks still have the right (since 2013) to wait the pending period with your available balance down before they refund a payment that they have already agreed to refund? Or must they raise the available balance straight away?

I have heard that even in general payment dispute cases that the available balance impact may be lifted for a payment expecting to be refunded.

In general the pending debit card payments system (due to being often invisible online with many banks), offline payments (contactless, merchants with special dispensation not to take authorization codes etc), continuous payment authority and the banking system in general have the greatest impact on the vulnerable, in particular those with learning disabilities.

The banking industry do not seem to have any kind of proper plan or strategy to usefully support people in this position. Any strategies there are have very significant limitations which banks do not seem to even understand. Does anyone have any experience of helping a vulnerable person manage the banking system?

agrinnall

It seems reasonable that for a CPA payment that has been initiated but not yet fulfilled the banks has to wait until it is actually taken before they will make a refund and cancel any future payments - that's the way it works for all sorts of payment. The time to cancel a CPA is before there is any activity to start taking the payment. Even better, don't interact with organisations that set them up in the first place.

meer53

They can't refund something that hasn't debited. If a pending transaction is affecting your available balance to such an extent that you can't manage, ask your bank to add a temporary overdraft to cover it until it either disappears or debits.