PayPal pre-approved payments and 123-reg

cammywebster

Hello

 A company I purchased something from (123-reg) took it upon themselves to setup a pre-approved payment for renewal of that product after the first year.  I did not explicitly consent to that transaction or consent to the money being debited from my PayPal account.  Additionally, they only emailed me 2 days before they deemed renewal was due and again did not obtain my explicit consent to the transaction.  The renewal was also processed 1 week before the annual anniversary - meaning that a calendar alert I had set to remind me of the expiry was not reached.

It appears that there is an agreement between PayPal and this company around this type of arrangement which works in both of their interests and not in the interest of the consumer.  PayPal have closed my dispute and there is no method of either replying to question the 'investigation' or to open another ticket.

Effectively, what PayPal are implying is that it’s legally fine for anyone I purchase something from (and use PayPal) to store my details and take payments from my account any time they see fit and without my explicit permission.  In this case, simply adding small print at the bottom of a notification email on the original purchase to state that auto-renew is switched on by default.  This is VERY dubious from a legal perspective.

Is this not called a ‘direct debit’ in banking parlance and should it not be covered by the same financial regulations as such?  At the very least, there has to be explicit consent to debit money from my bank account and I'd be interested to understand where that consent has been given.

Has anyone had a similar experience and can anyone clarify the legalities of the arrangement between PayPal and 123-reg and how this arrangement is permitted under UK law for financial services companies?  In an era when explicit consent is required for cookies on every website, I find it almost unbelievable that this sort of arrangement can be legal in the UK.

jsmith9

The notification email you received with the original purchase stated that auto renewal is switched on by default. I can understand you being confused by that - what it meant was that auto renewal was switched on by default. This is quite a common practice. You probably should have switched it off if you didn't want it. Yes, with auto renewal 'on' it is legal for them to auto-renew and take payment.

My car insurance auto-renews (via  a card, not paypal, although the same principle applies.)

Zanderman

Paypal have a recurring payments service.  It's similar to Direct Debits from your bank account or Continuous Payment Authority (CPA) from your debit card. If you've never come across it before then at least you know about it now.  It's not dodgy, but you should be aware it exists.

It's a perfectly normal arrangement.  No different to auto-renewals on insurance etc.  You've got no grounds for complaint apart from not noticing you'd signed up, albeit inadvertently, to auto-renewal.  The lesson is always to read the confirmation email.  And, before that, the ordering page where you confirmed your order as it would have been written on there too. You ordered an item with auto-renewal.

As for 123-Reg nearly all the domain name sellers and hosting providers try to get you signed up to auto-renew.  123-Reg are not unusual in that.  If you'd paid by debit card the same thing would have happened, but by CPA, not Paypal, and you still wouldn't have noticed if you hadn't read the details.  So you can hardly blame Paypal.

As above the lesson is to check what you're ordering and signing up to.  I have several domains and hosting services (none with 123-Reg) and they all try to switch me to auto-renew every time I manually renew.  I always click no thank you.

born_again

How do I cancel a recurring payment, subscription, or automatic billing agreement I have with a merchant?

1. Log in to your PayPal account.
2. Click Settings near the top of the page.
3. Click Payments.
4. Click Manage pre-approved payments.
5. Click Cancel or Cancel automatic billing and follow the instructions.

Given the type of service 123 Reg provide. I would expect nothing less that a recurring payment to ensure that the service they provide does not stop.
Would fully expect this to be covered in the T/C of the service you paid for.

Lets face it if you lost your domain name, or emails because you missed their email saying it needs to be paid by. You would be a bit miffed.

masonic

I'm confused, you set a calendar reminder for the renewal, which presumably means you intended to renew. As it happens, you did not need to take any action. Are you making a fuss as a matter of principle, or don't you want the domain any more? If you really want to cancel there might be other options available, how was the Paypal payment funded?

cammywebster

I’ve not been living in a cave for the last 20 years.  Thanks for the replies and condescension.

My point is, I did not explicitly give consent for 123-reg to debit my account at any time after the first transaction.  I’m well aware of the practice of auto-renewals and don’t like it being implied, so generally switch it off.  It almost always means “let us bump your renewal price up by 30% and hope that you can’t be bothered to shop around”.

Because it’s sometimes made difficult to contact companies to disable auto-renewal, I usually set a calendar reminder to let me know when to call them to negotiate or look around elsewhere.  That said, insurance companies generally give reasonable advance warning (weeks usually) which explicitly state that your payment method will be debited at renewal time.  123-reg made no such statement.  The renewal payment was also taken 1week before the anniversary and the domain was renewed 1 week before the anniversary meaning that I only got 51 weeks service.  To echo your condescending tones jsmith9 - does your calendar run for 51 weeks per year?  It would be good to see where in the 123-reg T&C’s that is called out.

In case jsmith9 you are not aware of the process of domain renewals, after the expiry date, the domain enters a grace period for a number of weeks where no-one can simply snap up your domain.  There is a risk during this period that services associated to the domain may cease.  As far as I’m concerned that’s my risk to manage.  In my experience, things generally continue to work but it depends on the registrar.

i contacted 123-reg to get a refund in order to transfer the domains I own away and it was not forthcoming.  I’ve had to send 2 x further messages requesting the same thing and still no progress.  PayPal - who were my last resort, closed my ticket and I can’t progress any further contact with them regarding that transaction through the normal channels.

This brings me back to my original point, in an era where explicit consent is required at every turn, how can it be fair and legal for consent to be implied when taking unauthorised payments?

If you walked into a bar jsmith9 and ordered a drink and got a receipt that said in small print at the bottom that every 5 mins another drink would be put on the bar and your card would be charged, would you be happy with that arrangement?  That’s maybe a bad example for places in full lockdown but you get my drift.

Zanderman

Actually the point is that you did give permission to renew. You're just not acknowledging that fact.
You're blaming 'the small print at the bottom of the email' but the permission was given when you placed the order. 
The email is merely confirmation of what you agreed. 
The error is yours - it is perhaps likely that 123-Reg didn't make it as visible as you'd have liked, but the error is still yours.  Auto-renewals are common.
You've also implied a fault by Paypal - but that's completely unfair.  You gave 123-Reg permission to make the auto-renewal - and it would be the same whatever the payment method.  It's not Paypal's fault that you signed up to auto-renewal.

cammywebster

Where did I explicitly give consent for further payments to be taken from my account?

The_Green_Hornet

https://www.123-reg.co.uk/support/my-account/how-does-auto-renew-work/

masonic

cammywebster said:

Where did I explicitly give consent for further payments to be taken from my account?

You say you've not been living in a cave for the last 20 years, so you'll be aware that binding legal contracts can be entered into electronically. Your explicit consent was probably obtained by the click of your mouse when you accepted the terms and conditions that include the term about autorenewals. If you believe no such term exists then you could always take legal action against 123-reg, but my money is on them having acted within the terms of your agreement.

jsmith9

You will hopefully agree that 'auto renewal' exists, and in certain circumstances can be useful.

When buying a product offering auto renewal (123reg, car insurance, club membership etc) if the purchaser agrees to auto renewal the the payment details are stored and used next time. This happened to you, and your paypal details were stored and used.

That said, it is obvious that you did not know you had signed up to auto renewal, so maybe your complaint should be directed at the 123reg sign up process. Could you go back to their web page, do a test application (don't enter payment details) and see where / if they mention auto renewal. Is it clear? Go back and look at the email (s) they sent you last time. You say they mentioned auto renewal, but could you easily spot it? If you think 123reg are acting unfairly in their selling tactics and not putting auto renewal prominently enough then complain to them.

Finally, going fowards, always have auto-renewal in the back of your mind when applying for things - merchants often have this pre-ticked so look out for it.