Dead authorised regular payments

Westwinds3

This month I was surprised to see an unexplained PayPal payment to Patreon for £3.60.  After some effort I found it was the result of an innocent mistake.

During the pandemic we paid a monthly subscription to Byline TV.  When Byline TV stopped, they ceased taking payments.  However, when they restarted recently, they unintentionally restarted the authorised payment system,

This raises a very worrying possibility.

Whenever we take Martin's advice and change a provider of utilities or insurance, the old provider ceases to take payments.

But the incident suggests that the authority to take payments is still out there, and could be reactivated at any time for any amount.

What happens if a bad actor gains access to a utility's records?  Or takes over a failed company?

Two questions:

1) Are the rules different for a Direct Debit, Authorised Regular Card Payment, and PayPal?

2) Do you need to specifically cancel a Direct Debit or Authorised Payment for a service that you no longer receive?

Grey_Critic

I would suggest contacting your bank and stopping any future payments - the bank make or stop payments ON YOUR instructions - If you stop dealing with a supplier then you need to inform them. 

No idea why they have started up again but if someone has managed to get access then there could be several zeroes added onto the next payment. 

https://en.wikipedia.org/wiki/Patreon - This is not a UK based business and you need to take care if sharing banking information.

My son does actually do some of this type of work but for specific companies worldwide hence but would not subscribe to this.

QrizB

Westwinds3 said:

2) Do you need to specifically cancel a Direct Debit or Authorised Payment for a service that you no longer receive?

Yes.

Cancelling PayPal authorisations is quite straightforward. You need to log in to your PayPal account and then you'll have the option.

Cancelling a Patreon membership is equally straightforward.

MyRealNameToo

Westwinds3 said:

This month I was surprised to see an unexplained PayPal payment to Patreon for £3.60.  After some effort I found it was the result of an innocent mistake.

During the pandemic we paid a monthly subscription to Byline TV.  When Byline TV stopped, they ceased taking payments.  However, when they restarted recently, they unintentionally restarted the authorised payment system,

This raises a very worrying possibility.

Whenever we take Martin's advice and change a provider of utilities or insurance, the old provider ceases to take payments.

But the incident suggests that the authority to take payments is still out there, and could be reactivated at any time for any amount.

What happens if a bad actor gains access to a utility's records?  Or takes over a failed company?

Two questions:

1) Are the rules different for a Direct Debit, Authorised Regular Card Payment, and PayPal?

2) Do you need to specifically cancel a Direct Debit or Authorised Payment for a service that you no longer receive?

1) Yes rules differ, for card payments its called Continuous Payment Authority

2) Yes/no, it's up to you. DD certainly end of their own accord after 2 years of no payments being taken. Cancelling a CPA can only be done at merchant level though so a block will prevent new CPAs being setup by that merchant unlike DDs so is a cruder tool

Nothing happens if a bad actor gets hold of the utilities records, all they could do is make you make more payments to the utility company. Being able to setup DDs requires a lot of authorisations unless going via middleman; you can instantly get a refund for any DD so as a tool it's not a good one for someone to commit fraud with. CPA requires a legitimate payment to go through first before the CPA then takes over for future payments. Under a CPA only the card number is needed whereas the first payment is going to require expiry date,  CVV etc which most won't store and the CVV cannot be stored by a merchant. 

Companies that have these payment authorities arent two bit organisations, if one fails it's going to be broken for parts or sold as a going concern. Whilst it has a negative balance sheet to buy it as a going concern they are going to have to convince the administrators they've the cash to make it work rather than the administrator sell off the parts. Your average fraudster generally won't be paying millions to get hold of a defunct organisation to attempt to defraud their previous customers. Much easier ways to get money off peoples cards.