Continuous Payment Authorities
If you’ve never heard of Continuous Payment Authorities (CPAs), you are not alone. And if you assumed that every payment going regularly out of your bank account must be a direct debit or a standing order, then again you are not alone. But you are mistaken.
Continuous Payment Authorities look very like direct debits but, crucially, they do not have the guarantee that comes with a direct debit – meaning that the company being paid can take payments on any date and for any amount. They can basically take, at any time, what they think they are owed.
The direct debit guarantee protects the customer by stating that payments can be taken only on, or near, a certain date and for a set amount. The direct debit agreement is in writing, signed by both parties, but there is very often no written evidence of a CPA.
Recognizing Continuous Payment Authorities
Sometimes spotting a CPA is easy – if there is a regular payment going out of a credit card account, for example, it must be a CPA because direct debits and standing order cannot be set up on such an account. Also, to set up a direct debit, the only information required is the bank sort code and account number; if the long number across the bank card is requested, then a CPA is being set up.
You can cancel a CPA by telling the company or the bank. If a bank is asked to cancel a CPA, it must do so, and it must also ensure that no future payments are made.
Many businesses like to use CPAs – for example, gyms, Amazon (for Amazon Prime and Amazon Instant Video) and some payday loan companies. If you cancel a CPA through the bank, you should tell the company too. If you have a contract with them, you may need to ensure that payment is made by some other method if the contract is not cancelled.