A guide to continuous payment authorities

A continuous payment authority (CPA) is a recurring payment taken from your credit card or debit card to pay for things like subscriptions, membership accounts or loan repayments.

Find out how to recognise when you’re signing up to a CPA and how to cancel it if you need to.

What is a CPA?

A CPA is a type of payment that a business sets up on your credit or debit card account.

It gives the business the power to take not just one payment but recurring payments from your bank account or credit card, as and when it’s believed it’s owed money. It can also change the amount it takes each time.

CPAs can be controversial because you may find them difficult to cancel. And in some instances, customers say they didn’t give permission for a CPA to be set up on their account or that they were unaware they were entering into a CPA agreement.

This can happen, for example, when you sign up to a ‘free trial’ offer. Unless you cancel after the free trial ends, your card will be charged.

What sort of companies might use one?

Businesses such as gyms, magazine and subscription websites, streaming services, telecoms (including mobile phone contracts), car insurers, plus payday lenders and debt collection agencies may use this type of payment method.

How is it different from a standing order or direct debit?

With a standing order or direct debit, you’re more in control of your payments and have an increased level of protection. You set the payments up and you can easily cancel them.

CPAs can sometimes be a little more difficult to cancel. You need to contact the company taking the payments or your card issuer and rely on them to cancel the payment quickly.

• A standing order is an instruction you give to your bank to pay a regular amount to a business or person. You can cancel or change the amount you pay at any time - online, on your banking app or by contacting your bank on the phone.
• To set up a direct debit, you sign a direct debit mandate from the company you want to pay. They then tell your bank that you’ve given them permission to collect that money. The company must tell you of any changes to the payments they want to make before they collect them and you can cancel the direct debit at any time by contacting your bank. Any errors that occur are covered by the Direct Debit Guarantee which means that the bank must refund you if the wrong amount is taken from your account.

How is a CPA set up?

Companies should always ask your permission to set up a CPA. Read the small print on any subscriptions or memberships you sign up to. It might state that, by providing your credit or debit card number, you’re authorising a CPA.

If you’re happy to set up the CPA, you’ll simply need to supply the company with your credit or debit card number, the card security code (CV2) and expiry date.

Finding CPA payments on your bank statement

They can be tricky to keep track of because they’re not listed as CPA transactions on your bank statements.

You’ll need to go through your statements to check for regular debit payments; if they’re not labelled as direct debit (DD) or standing order (SO) transactions, then it’s likely they’re CPAs.

Any regular payment on your credit card statement will be a CPA, as it’s the only type of regular payment you can make on a credit card.

How to cancel a payment

You can cancel a CPA directly with your card issuer and/or the company that’s taking the payments.

If the company refuses to cancel the CPA (perhaps if they say you’ve entered a contract you’re committed to or they’re disreputable) then your card issuer (the bank, building society or credit card company) must do it.

It’s their legal duty to stop the payments immediately. They can’t tell you that you need to sort out the issue with the company instead.

After you’ve cancelled, check your statements and if payments continue to be taken out, then you can ask your card issuer for a refund. If you don’t get refunded, you can make a complaint to the card issuer.

If you’re not satisfied with their response, you can take your complaint to the Financial Ombudsman Service.

Do remember, of course, that, if you cancel a CPA but still owe money to a company (for example on a payday loan), you’re still responsible for that debt.

Does cancelling my card stop a CPA being taken?

This won’t necessarily be enough to stop payments. It’s best to contact your card issuer or the company taking the payments to ask them to cancel the CPA.

What if I switch bank accounts?

You’ll need to provide the company with your updated bank account details so that the CPA can continue.

Alternatives to CPAs

If you prefer not to take out a CPA, you could ask the company involved if they would accept payment by standing order or direct debit instead.