Continuous payment authority (CPA) is when you authorise another to take regular payments from your account. Also known as recurring payments, it is mostly utilised for payday loan repayments.
What are the issues with recurring payments?
If the payment date or amount changes, they do not offer the same guarantee and they are hard to cancel. Companies can keep draining your money without giving you notice.
The bank or card provider may be unable to prevent the payments from going through, putting the client into financial difficulties.
How do you cancel continuous payment authority?
Every customer has the right to cancel their CPA. You can do this by calling your bank or going into a branch. Make sure your request to cancel has been recorded with the date and time of your call.
To ensure the process goes through completely, send a copy of the letter to your payday lender stating that you have cancelled your CPA. If the bank refuses your demand to cancel, file a complaint. All CPA funds with interest after the date of asking for cancellation will then be refunded to you. The last day to cancel the CPA is the last working day before your payment is due.
Ways to avoid recurring payments on a payday loan
- Use direct debit as cancelling this is easier and any error on the bank’s part will guarantee a refund.
- A standing order also works as it leaves you in complete control.
The allthelenders website is the perfect place to research payday loan lenders. It is the UK’s first price comparison website for the payday loan industry, and it is authorised and regulated by the FCA. The site gives independent and impartial results that are based on the cost of the loan.