Continuing Authority - DANGER!

Mr_McGoo

I have just been advised by a letter from Lloyds TSB that if a retailer buries in their Conditions one that says providing a CC number means that you are giving the retailer a "Continuing Authority" which is an indefinite right to use that card to take payments, there is nothing they will do about it if the retailer uses that right fraudulently.

Even if you cancel the card LLoyds TSB (and any other provider) will accept debits and pass the charges on to you for settlement. They seem to take the view that it's your fault for giving the Continuing Authority, and they might be right.

This arose after a "free trial" of a service (Which reports), when although I had given proper notification that I did not wish to continue the first monthly payment was taken. I contacted Lloyds TSB to repudiate the payment but was told it was between me and Which, and they would continue to accept monthly debits if Which asked for them.

The moral is not to use Credit Cards for any form of payment where this might be a problem, without checking the small print in the T & Cs very carefully indeed (usually impractical). On Line sales are the obvious case, but I would suspect that certain High Street operators might pull the same trick.

I don't know of the same applies to Debit Cards, but I'm hoping there's an expert out there who does.

To me the CC providers attitude to this stinks; surely a card holder should be able to prevent a retailer from taking unauthorised payments from an account, without having to persuade the retailer to desist. It's like the Police telling a burglary victim to contact the burglar to get his stuff back because it's not the Police's problem.

Voyager2002

However, if the payments are fraudulent then the card company will take action. And if you can prove that you cancelled within the terms stated for the "free trial" and/or that you did not receive the goods/service for which you are paying, then you do have some redress.

This is a good reason why you should never, ever, let a pornography website have your card number, even if they claim that it is purely to verify your age and you will not be charged anything. Once these unsrupulous people have the card details they can claim to have a continuing authority, and since they are based overseas it is difficult to do anything about them.

Mr_McGoo

However, if the payments are fraudulent then the card company will take action.

if you can prove that you cancelled within the terms stated for the "free trial" and/or that you did not receive the goods/service for which you are paying, then you do have some redress.

I fully accept that the woman I spoke to intially in Lloyds TSB may have been wrong, but she specifically said when I queried that point that if I had given a continuing authority, inadvertently or otherwise, the card company could/would not take any action, and that I had to deal with, and if necessary take legal action against the retailer for recovery. That was the moment at which she advised that even closing the account would make no difference.

a11waysindebt

You need to advise the bank or card company in writing about closing the order.

lisyloo

I am not sure of the legal position in the case of fraud but in a non-fradulent case there is certainly no ability to unilaterally cancel a continuing card authority (CCA) even if he account is closed.
In my book this mean they should be avoided.

Direct debits are different in that you have the right to unilaterally cancel them which gives you more control.
This is NOT the same as cancelling a contract and you may still be pursued by a company through the legal system and be charged fees and get a bad credit rating, howeber you ARE in control of the payments.

Stopping payment when you are in dispute is not always a good idea because it can go down on your credit report and give you problems for 6 years.

Nevertheless the right to unilaterally cancel is there and you have control over what is taken from you.

My advice is NEVER sign up to anything on CCA.
Check all Ts&Cs as fully as is practical
I know it's not always possible to read the whole lot but it should be possible to ascertain whether it's "one-off" or a continuing payment.
If suspicious then ASK or take you business elsewhere.

lisyloo

You need to advise the bank or card company in writing about closing the order.

Wrong (if you are referrring to CCA).
You can only stop it at the retailer.

lisyloo

she specifically said when I queried that point that if I had given a continuing authority, inadvertently or otherwise, the card company could/would not take any action, and that I had to deal with, and if necessary take legal action against the retailer for recovery. That was the moment at which she advised that even closing the account would make no difference.

This is all true, but this doesn't sound like fraud to me.
I think they have to act differently if it's fraud.
"inadvertant" to me reads like someone didn't read all the Ts and Cs, which is not the saem as fraud.

Obviously we don't have the entire conversation to listen to but there is a difference between someon not understanding the contract they signed up to and deliverate fraud i.e. they didn't sign up at all.

How did you cancel your which subscription?
Did you keep a copy of the letter on your PC?
Did you send it recorded delivery?
Did you get a free proof of posting?

I keep copies of all letters electronically (so they can be easily reproduced) and in this case (a company I expected to be reputable) I would probably have fone for a free proof of posting so I could prove I cancelled.

missile

I would avoid "free" subscription to any of those "reputable" companies e.g. Which and Readers Digest

Nikko5

Can you not report your card "lost" to your bank in order to get these fraudulent CCA payments to stop coming off your account? The bank should cancel your current card and issue you with a new one which will have different 16 digit number and expiry date etc.

Can anyone think of any reason that this would not work?

fabsaver

There are lots of 'reputable' companies that use these continuing authorities now (car insurance, car breakdown providers, etc...). I find it a real pain trying to keep track of them although sometimes they do write and let you know before renewing something.

When signing up for any free trials I always use the direct debit method and then just cancel it with my bank. I've never had any problems using this method;)

FlyHigh_2

Nikko5 wrote: »

Can you not report your card "lost" to your bank in order to get these fraudulent CCA payments to stop coming off your account? The bank should cancel your current card and issue you with a new one which will have different 16 digit number and expiry date etc.

Can anyone think of any reason that this would not work?

Nope, whether the card is reported is reported lost / stolen / closed or anything else if you give a company authorization to take payments continuously then they will do exactly that! The payments will still leave your account. The banks can only dispute the payments if you prove you've tried your hardest to cancel these services.