Banks unclear over repeat payment cancellations
Banks’ customer service advisers are unclear about how to cancel Continuous Payment Authorities (CPAs) according to Consumer Focus.
Customers are also confused about cancelling CPAs according to the consumer group, even though new regulations were introduced by the Financial Services Authority in 2009 to make the process simpler.
The confusion could be causing some people to go overdrawn or to pay for something they no longer require.
A Continuous Payment Authority (CPA) can be set up to pay a regular amount to service providers such as gyms, Internet Service Providers and even Payday Loan companies.
They are similar to direct debits and standing orders, but to set up a CPA the customer gives a company their debit or credit card details, rather than bank account details, allowing the company to take a payment whenever one is owed.
In contrast, standing orders are set up via the customer’s bank and are for a fixed amount at regular intervals, while direct debits are arranged after the customer has signed a direct debit mandate and are for variable amounts.
Customers can cancel direct debits and standing orders at any time by contacting their bank, and since November 2009 this has also been the case for CPAs.
However in mystery shopping tests carried out by Consumer Focus 44% of the 300 customer services advisers questioned either gave no answer, or the wrong answer, when asked about stopping a CPA payment.
There is no need for customers to ask the company which receives the payment to cancel the CPA, but more than half of the customer advisers said that this was the correct procedure.
Sarah Brooks of Consumer Focus said: “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.”
Although the Financial Ombudsman Service has received regular complaints about CPAs, a recent survey suggests that customers’ satisfaction with financial services providers is improving.
Around 14,000 consumers responded to the latest Moneywise Consumer Opinion Survey, with most companies receiving higher scores than previous years.
The shortlist for the Most Trusted Financial Provider overall includes Coventry Building Society, First Direct, Nationwide Building Society, NatWest, Smile and The Co-operative Bank.