You are here: Home - Credit Cards & Loans -

Consumer Focus research shows Continuous Payment Authority confusion

Written by:
Consumer Focus research shows that banks' customer service advisers are unclear of the rules around Continuous Payment Authorities (CPA) and could be giving customers incorrect advice as a result.

Consumer Focus research shows that banks’ customer service advisers are unclear of the rules around Continuous Payment Authorities (CPA) and could be giving customers incorrect advice as a result.

The mystery shopping survey found that almost half of advisers (44%) gave the wrong answer or couldn’t give an answer, when asked how to cancel a CPA. This lack of clarity from the banks makes it difficult for consumers to know their rights around CPAs, which could be leading to payments being taken without the customer’s knowledge or consent.

A CPA is a type of regular automatic payment arrangement set up using a debit or credit card. Similar to a direct debit, consumers give a supplier or retailer permission to take payments on their card. CPAs are favoured by many businesses, including payday loan providers, gyms, insurers, magazine companies and internet service providers. The timing and amount of the payment may vary. A CPA may also be called recurring payment authorities, recurring transactions or recurring payments.

Consumer Focus undertook mystery shopping among nine leading retail banks in order to test customer advisers’ awareness of how consumers should go about cancelling a CPA. The correct answer would have been to cancel the CPA through the bank, while also advising the supplier or retailer that the CPA was being cancelled.

The survey found only 56% of customer service staff gave a correct answer, 44% got it wrong or could give no answer at all. Worryingly, 28% of customers were told they could only take their query to the company which had set up the CPA, which is contrary to Financial Services Authority guidance.

Sarah Brooks, director of financial services at Consumer Focus, said: “CPA’s are a frequently used but little understood form of payment. Problems with cancellations are leaving consumers going overdrawn or paying for something they no longer want, which is unacceptable. Customers are naturally not experts on this payment method, so it is essential bank staff know the rules and give clear and accurate advice. “Consumers should be clear that they can cancel a CPA simply by contacting their bank. Ideally the customer should also contact the business involved- but crucially they do not need the company to cancel the CPA for them.”

Tag Box




Financial fitness

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

Are you a first-time buyer looking for a mortgage?

Look no further, get the help you need by searching for your perfect mortgage

Which ISA is right for you? A round up of the six products available in 2017

From cash to innovative finance to lifetime, here's our guide to the ISA products available to savers this yea...

Guide to buy-to-let tax changes

In late 2015, former Chancellor George Osborne announced a range of  tax measures aimed at landlords, which t...

A guide to switching energy provider

All you need to know about switching from one energy supplier to another.

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

Five fund tips for a 0.25% interest rate environment

With interest rates stuck at a record low 0.25% and expectations rates could fall to close to zero, here are ...

Protecting family wealth: 10 tips for cutting inheritance tax

Inheritance tax - sometimes known as 'death tax' - can cause even more heartache for bereaved families. But th...

Travel insurance: Five tips to ensure a successful claim

Ahead of your summer holiday, it’s important to make sure you have the right level of travel cover or you co...

Investing your money

Alliance Trust Plc gives you smart insight into how to invest your money

Money Tips of the Week

Read previous post:
New advice guide explains credit card rights

The UK Cards Association has published a new plain English advice guide giving Britain's 30 million credit card holders clear...