Cancelling a recurring payment or continuous payment authority on a payday loan

What's a continuous payment authority?

A continuous payment authority is a type of regular payment made using your debit or credit card. It’s set up when you give your card details to a company so they can take one or more payments from you at a later date.

There’s often confusion around how these payments work, and what rights you have compared to other regular payments such as Direct Debits and standing orders.

Continuous payment authority is a popular method of payment for:

• payday loans
• magazine subscriptions
• gym memberships
• some debt collection agencies

CPA is different to Direct Debit. Payments made by CPA aren’t covered by the Direct Debit guarantee, but the law still offers you similar protections. For example, you’re still entitled to a refund of any money taken without your permission.

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How do I stop recurring payments for loans?

You can cancel a continuous payment authority by contacting your bank or the company taking the payment.

When you cancel a CPA it means you’re withdrawing your permission for the creditor to use your card details in the future. If any more payments are taken after you’ve withdrawn your permission they’d be ‘unauthorised’.

The deadline for stopping a CPA payment is before the close of business on the working day before your payment is due to be taken.

• If your payment was due to leave on a Friday, you’d need to get in touch with your creditor or bank before they close on the Thursday to cancel it.
• If your payment was due on a Monday, you’d need to cancel it before your creditor or bank closes on the previous Friday.

If you miss this deadline, you won’t be able to stop the payment being taken.

Template letter to cancel a CPA

To cancel a CPA you’ll need to contact the company taking the payment, or your bank to cancel your recurring payment. This can be done over the phone, by email or in a bank branch, and we also have a continuous payment authority template letter [PDF] you can use to do this. If the payment is due to be taken in the next few days, we recommend cancelling it by phone.

If you call your creditor, we’d recommend you keep a note of the time and date of the phone call, as well as the name of the person you’ve spoken to about it. If you contact your bank to stop a CPA, you should contact the company as well to let them know.

Even if you’ve cancelled a CPA, you’ll still owe the money for the payments you’ve agreed to make. If you’re struggling to make the agreed payments you should get in touch with the company to let them know.

Arranging a refund of  an unauthorised payment

If you’ve cancelled a continuous payment authority before the deadline and the payment is still taken, this is known as an ‘unauthorised’ payment. If this happens, you should get in touch with your bank to let them know. They should arrange a refund of the payment and any related charges you may have received due to the money leaving your account.

Cancelling recurring payments to a payday loan

If you can’t afford to make the payments towards your payday loan you should be entitled to cancel them. If your creditor refuses to refund the payment, or refuses to cancel your CPA, you can make a complaint.

Missing payments towards a payday loan may be the sign of a debt problem. If you need help, take two minutes to answer a few simple questions, so we can understand the best way to support you. Or call us for free advice about debt solutions that suit your situation.