Continuous Payment Authority (CPA), or ‘recurring payments’ is a collections method adopted by various UK lenders that gives them the means to automatically collect funds from a customer’s debit account on the day of their contracted repayment date. However, lenders are only able to do this if the customer is briefed and agrees to the terms beforehand.
How is it different to direct debit or standing order?
Continuous payment authority means that the lender can take several payments from the customer’s debit or credit card account, that were pre-approved, without having to ask for permission or authorisation for each payment.
CPA has had its fair share of controversy and criticism. Nonetheless, its purpose is to make your life easier, and it can, as long as you know your rights:
The FCA states that a company should not authorise the CPA unless its use has been explained to the customer and it has been mutually agreed to in the credit or P2P agreement.
A provider should contact the borrower if they wish to change the terms of a CPA. As well as this, they must provide an adequate reason for this change, and acquire the borrowers consent. You, as the customers, have the right to decline their proposition.
How Do I Cancel CPA?
You have a right to cancel your CPA at any time. You can do this via:
• The bank
• Card provider
• With the lender directly
Once you have asked your bank or card issuer to discontinue the CPA, you should inform your lender immediately to prevent them from attempting to collect repayments.
Just note that the repayments that were collected before you chose to discontinue will either be refunded fully or partially, depending on the lender and their discretion.
You should note that cancelling your CPA does not mean you are void from making your contracted repayments. It just means that you will have to negotiate on a new means of repayment with your lender.
Bear In Mind
Lenders usually reserve the right to use the CPA and attempt to withdraw payment from customers’ accounts 90 days past your repayment date.
This is only permitted if the customer and lender have agreed to it in the terms and conditions. So, be sure to double check this on your signed loan agreement before you accept the action.