Banks pay out for failure to cancel

image
Print Friendly

Consumers whose banks and building societies fobbed them off when they tried to cancel recurring payments are in line for compensation payouts.

The Financial Conduct Authority (FCA) has reached an agreement with major high street banks and mutuals that they must trawl through their records going back to 2009 to look again at the complaints they have had after a customer asked for a payment to be cancelled, only to find this did not happen.

The agreement relates to a type of payment called a continuous payment authority (CPA), which are often used when people sign up to use the services of gyms, payday lenders, insurance companies and internet firms.

More than £7.5 billion-worth of payments are made through CPAs each year. They are automatic payments which work in a similar way to a direct debit, with consumers giving a supplier or retailer permission to take payments on their card.

The FCA has moved to act following concerns that, particularly in relation to payday loans, some banks and mutuals were not cancelling CPAs when asked to do so by their customers. Several charities have highlighted problems with payday loan firms using CPAs to drain people’s bank accounts of cash without warning.

Transactions made through CPAs are worth £45 on average, but for those relating to payday loans the typical amount rises to £80.

Research by Consumer Focus last year found that many bank staff were giving wrong advice to customers about how to cancel such payments and telling them that they could only take their cancellation query to the company which had set up the CPA, which is contrary to guidance set out by regulators.

Customers should be able to cancel the payments through their banks.

The agreement means that banks will look back at all their complaints going back to November 2009, when the FCA’s predecessor, the Financial Services Authority, began to regulate banking conduct.

The FCA believes an estimated 25,000 to 30,000 customers will be affected and banks will be looking through the complaints themselves to see who is owed money.

Dan Plant, head of editorial at consumer help website MoneySavingExpert.com, said: “This scandal has been allowed to fester and grow for too long – it’s high time banks were forced to cancel these payments when asked, as they have been obligated to for years.

“People have a legal right to cancel recurring payments, but banks have fobbed them off either because of incompetence or something worse. If you’ve had a request to cancel a payment kaiboshed since 2009, complain to your bank now.”

The following two tabs change content below.

Press Association

Latest posts by Press Association (see all)

Not a member?

Join the silversurfers community today! It's free, easy to do, and is packed full of features and amazing offers!

Join the community!
Click here if you have forgotten your password

Community Terms & Conditions

Content standards

These content standards apply to any and all material which you contribute to our site (contributions), and to any interactive services associated with it.

You must comply with the spirit of the following standards as well as the letter. The standards apply to each part of any contribution as well as to its whole.

Contributions must:

be accurate (where they state facts); be genuinely held (where they state opinions); and comply with applicable law in the UK and in any country from which they are posted.

Contributions must not:

contain any material which is defamatory of any person; or contain any material which is obscene, offensive, hateful or inflammatory; or promote sexually explicit material; or promote violence; promote discrimination based on race, sex, religion, nationality, disability, sexual orientation or age; or infringe any copyright, database right or trade mark of any other person; or be likely to deceive any person; or be made in breach of any legal duty owed to a third party, such as a contractual duty or a duty of confidence; or promote any illegal activity; or be threatening, abuse or invade another’s privacy, or cause annoyance, inconvenience or needless anxiety; or be likely to harass, upset, embarrass, alarm or annoy any other person; or be used to impersonate any person, or to misrepresent your identity or affiliation with any person; or give the impression that they emanate from us, if this is not the case; or advocate, promote or assist any unlawful act such as (by way of example only) copyright infringement or computer misuse.

Nurturing a safe environment

Our Silversurfers community is designed to foster friendships, based on trust, honesty, integrity and loyalty and is underpinned by these values.

We don't tolerate swearing, and reserve the right to remove any posts which we feel may offend others... let's keep it friendly!

More Financial

Plan a secure and brighter retirement Plan a secure retirement image
Do you want to know how to plan a secure & brighter retirement – it’s easier than you...
Budget ahead for the festive season Pig Money Box Between Christmas Gift
Between the parties, family feast and wrapped presents under the tree, the festive period can get...
Common financial scams and how to spot them Online scamming concept with hand wearing black glove
Unfortunately scammers are becoming more sophisticated in the way they try to steal information...
Six top tips for planning your funeral Silversurfers GC article 2
Plan for the future We’ve already outlined in our previous article how the cost of dying...
Finding information on benefits and grants bigstock-family-business-savings-age-80191997
With everyone trying to cut costs these days, it’s increasingly unlikely that people will hand...
Setting up a savings account for your grandchild family, children, money, investments and people concept - close
Watching your grandchildren grow up is a rewarding and special time and it may seem like a long...
What does the budget mean to Silversurfers? osbo
Chancellor George Osborne’s Budget offered up a few surprises today and there was plenty for the...
Setting up your children for financial success education, school and money saving concept - smiling child putti
With the cost of living and education on an upward trajectory, you might find your adult children...
Get funding for your business British Pound Sterling Coins Stack
Whether you are starting out in business, or attempting to enhance an existing project, everyone...
Autumn Statement: What it means for you Autumn Statement
A wholesale reform of Stamp Duty on property purchases and changes to the rules on the way...
Easy ways to make money – without a new job Money Saving
When you're in need of some extra cash it seems inevitable that you'll have to take on a new job...
Simple ways to save for Christmas Piggy bank with Santa Claus hat balancing on a Christmas ball
Now that November is here, retail shops around the country are getting ready for Christmas...