A continuous payment authority, or CPA, is a payment that’s taken from your credit or debit card. Not to be confused with a standing order or direct debit payment, a continuous payment will be made whenever it’s requested by the company you set it up with. It’s important to be aware of any continuous payment authorities you have set up to go out of your bank account.
What does continuous payment mean?
Continuous payment means that money can be taken automatically, at any point, by the company you set up the agreement with. Continuous payment authorities are also known as recurring payments, regular card payments or regular card payments.
All kinds of businesses use continuous payment authority as a payment method – they’re very common. If you pay money to any of the following, it could be via continuous payment authority:
- Gym memberships
- Streaming websites
- TV package subscriptions
- Magazine subscriptions
- Payday loan companies
How does a continuous payment authority work?
Usually, to set up a recurring or continuous payment, you’ll be asked for the 16-digit number on the front of your credit or debit card, either in person, online or over the phone.
The payments you make by continuous payment authority can vary in both the amount and the frequency that the company takes them. They’re usually taken from your credit or debit card, rather than directly from your bank.
You can set up a continuous payment authority for a regular, fixed monthly payment, a less frequent payment or even just one payment that needs to be made at some point in the future. It can be helpful to keep a note of any continuous payments you have going out of your bank account to help you keep track of your outgoings.
Is a continuous payment authority like a direct debt?
Both continuous payment authorities and direct debits allow a business to take regular payments from your bank account automatically, but it’s important to note the key differences:
- A direct debit will usually leave your account on or around the same day every month, while a continuous payment will be taken every time the vendor decides you owe them money.
- To set up a continuous payment authority, you’ll usually be asked to provide the full, 16-digit credit or debit card number to the vendor. To set up a direct debit, on the other hand, you only need to provide your bank account and sort code.
- A continuous payment is not protected by the Direct Debit Guarantee.
Another form of regular payment is a standing order – but this is a regular payment that’s set up and controlled by you, and you are the only person who can update or change a standing order instruction.
Can I stop a continuous payment authority?
Yes. You should be able to cancel a continuous payment authority by getting in touch directly with the company you set it up with. If you decide to do this, it’s a good idea to get written confirmation by letter or email that the CPA has, in fact, been cancelled.
If, for any reason, you can’t cancel the CPA with the original company it was set up with, you can instead cancel it directly with your bank. Again, getting written confirmation of the cancellation from your bank is always sensible.
It hasn’t always been this way. Until 2009, you could only cancel a continuous payment authority with the original vendor, but now it’s possible to instruct your bank directly to cancel the payment – and they must do this. Just bear in mind that you should tell your bank at least one full day before the payment is due to leave your account to avoid the money being taken in error.
Are continuous payment authorities a bad thing?
No, they’re just an alternative method of making payments for subscriptions and services.
However, it’s important to understand that they do not offer a guarantee and may afford you less control over your outgoings than a scheduled payment method. If you struggle to manage your money, or are trying to gain control over your budget, it could be worth finding out if you could change the continuous payment authority to a direct debit or standing order payment instead.
How do I find out if I have a continuous payment authority?
If you’ve set up any form of regular payment that required you to provide your full credit or debit card number, it’s quite possible that this was a continuous payment authority.
And if it’s been a while since you set up the payment and you can’t remember how you arranged it, you can always check through your bank statements to find out. Just look for any payments that aren’t classified as standing orders or direct debits. It can be more difficult to spot a continuous payment authority than a direct debit, as they may not come out of your account on the same day, or for the same amount every time.
To be certain, you can always get in touch with the company that’s taking the payment to confirm what it’s been set up as or speak to your bank for more information about the payment.
How do I get a refund of a continuous authority payment?
If you requested that your bank cancel a continuous authority payment and they failed to do so, you can claim for this money to be refunded.You’re entitled to a full refund of any money taken by the vendor after your request to cancel if you were told by the bank that they couldn’t cancel it or that you’d need to cancel the payment directly with the retailer.
However, if the money was due to the company and you were still in contract you may not be able to get a refund.
Cancelling a CPA payment to a payday loan company
A continuous payment authority can become problematic if you’ve taken one out as part of an agreement with a payday loan company – because the company may continue to take payments that leave you in financial difficulty, or take payments that you didn’t plan for.
However, as a customer, the most important thing to remember is that you are well within your rights to contact your bank or credit card company and cancel the continuous payment authority to the payday loan company. When you do this, it’s also a good idea to get written confirmation of the cancellation from your bank and to make a note of:
- Who you spoke to at your bank
- The date you requested cancellation
- The time of day you called
You should also get in touch with the payday loan company that you had the continuous payment authority with to let them know that you’ve cancelled the payments with your bank. If you still need to make payments to them, you could ask to make the payment manually, or you could always set up a standing order or direct debit.
What happens to a recurring payment if I switch bank accounts?
If you switch bank accounts, or your payment card expires, the continuous payment authority won’t automatically switch over or update with the details of your new banking provider.
Usually, if this happens, the company will get in touch with you to notify you that your card has expired, or that something isn’t right with your payment information. However, if you’re changing banks, it’s always a good idea to double-check all your payments have updated – otherwise it could result in important products or services being put on hold. For example, if you pay an insurance by continuous payment authority and the payment fails, you may not have full cover or be able to make a claim if you’ve missed a payment.
