Check If You Qualify

What's a ‘continuous payment authority’ and how to cancel it

Sharon McDougall - Updated - 2nd August 2023 - 4 minutes to read

Continuous payment authorities, or CPAs, are often used by payday loan providers as a way to take repayments via a debit card, or sometimes a credit card. A CPA effectively grants permission to take recurring payments, but it can be hard to revoke if you later experience financial difficulty and need to cancel the authority.

Agreeing to a continuous payment authority can cause your overall debt situation to worsen. The payday loan company can take money from your bank account whenever they believe a payment is due, and the ability to prioritise debts such as your mortgage, rent or council tax, is taken away

Prior to 2009, only a lender could cancel a CPA, but under the Payment Services Regulations you can now cancel recurring payments yourself.

What exactly is a continuous payment authority?

A continuous payment authority on a payday loan is an agreement that allows the lender to take money from your debit or credit card, whenever they believe a payment is due. CPAs are sometimes compared with direct debits, but they don’t have the same built-in consumer protection and easy ability for the borrower to cancel them.

This is why you need to be wary when taking out a payday loan, as the lender also has no obligation to inform you in advance of the payment amount or when it will be taken.

The term of a payday loan can be as short as one week, or up to several months, and by using a CPA lenders don’t need to obtain permission to take individual payments from your bank account or credit card.

How does a CPA work?

When a payday loan provider sets up a continuous payment authority, they ask for the long number from your debit card. This is in contrast to a direct debit authority which requires your sort code and account number.

As far as credit cards are concerned, any recurring payment that’s been set up on your card will be a CPA, because you can’t set up direct debits or standing orders on a credit card account.

The terms and conditions of a continuous payment authority used to allow a payday lender to make unlimited attempts to take money from a bank account. If the first claim for the full amount was refused by the bank, they would use the agreement to claim smaller amounts.

Under new rules, lenders can now only make two attempts to obtain money from your account unless you’ve agreed to rollover the balance, and these can only be for the full amount due.

Our Impact

quote icon Since getting in touch with Scotland Debt Solutions, my relationship with money has completely changed. My debts are reducing every month and I can look forward to a time when I will be completely stress-free.” quote icon
Speak to a Debt Expert

How to cancel a CPA?

To stop a payday loan payment you should phone, email or write to your bank and ask them to cancel it. Make sure you note down the date, time, and the person you’re speaking to in case there’s a later dispute.

The cancellation deadline is close of business on the working day before the payment is to be taken. There are templates online that you can download to cancel a continuous payment authority. It’s also worthwhile emailing the lender to let them know that you won’t be making the latest payment.

If you’re wondering whether cancelling your debit card will stop recurring payments, unfortunately it won’t. A payment can be taken even when your card has been cancelled and destroyed – the only way to stop these payments is to approach the bank or card provider.

Continuous payment authority refunds

If a payment is taken by a payday lender without your permission, you have the right to a refund of this amount plus any additional charges. In the same way that banks must cancel an agreement if you request it, they must also refund payments after you have attempted a cancellation.

If your request has been ignored or declined by the bank, you can take your complaint to the Financial Ombudsman Service, which is a free resource set up to resolve disputes between financial firms and their customers.

Because payday loans are relatively easy to obtain, borrowers are likely to encounter problems with continuous payment authorities. We can help if you’re trying to cancel a CPA and are experiencing issues, or simply need more information about your rights. Scotland Debt Solutions has been helping Scottish residents out of debt since 1989. Call our expert team for a free initial consultation at one of five offices around the country.

facebook colour icon linkedin colour icon messenger colour icon whatsapp colour icon email colour icon
Sharon McDougall Square

Sharon McDougall

Manager

Other Articles

9 practical tips for cutting your household expenses Household Expenses

9 practical tips for cutting your household expenses

We all want to save on our household bills and have more money in our pocket for the fun things in life. While bills are an unavoidable fact of life, here are some ways you can help to reduce them:

7 Advantages of using a Debt Arrangement Scheme to become debt-free Debt free happy woman

7 Advantages of using a Debt Arrangement Scheme to become debt-free

If you’re trying to deal with overwhelming amounts of debt, you may be eligible for the Debt Arrangement Scheme in Scotland.

10 steps to take now to improve your credit rating Credit Rating

10 steps to take now to improve your credit rating

If you are currently working on reducing the amount of debt you have, improving your credit score may not be at the top of your agenda.

About

Why Choose Us

Usp Discussion

Speak Direct With

A Qualified Adviser

Headset

We Don't Operate

Call Centres

Usp Location

5 Offices in Scotland

National Coverage

Usp House

Ask us About

Home Visits

Usp Award

Fully Regulated Advisors

From a Reputable Firm

Usp Hand Heart

Helping Scots Get

Out of Debt Since 1989

We'll give you a call

Our Scottish based team can help advise you on your debt problems.

Here at Scotland Debt Solutions we take your privacy seriously and will only use your personal information to contact you with regards to your enquiry. We will not use your information for marketing purposes. See our Privacy Policy.

Tools

Useful Tools

Personalised Debt Report
Usp Planner

Personalised Debt Report

Our personalised debt report will help you better understand your financial position and see where your money is going.

Debt Report
Instant Scheduled Call & WhatsApp
Headset

Instant Scheduled Call & WhatsApp

Arrange a call with an expert advisor at a time to suit you or contact our team via WhatsApp for immediate help and advice.

Arrange Callback
Find a Local Office
Usp Signpost

Find a Local Office

We have five offices located across Scotland. Find your nearest one here.

Find an Office

OUR SERVICES

We can help you with...

Sequestration

Sequestration

Sequestration is the Scottish version of bankruptcy and may be suitable for you if you do not have the money to pay back your debts

Find out More
Trust Deeds in Scotland

Trust Deeds in Scotland

A Trust Deed involves making a monthly contribution to your debts for up to four years. After this time any remaining debt included in the Trust Deed will not need to be paid.

Find out More
Debt Arrangement Scheme (DAS)

Debt Arrangement Scheme (DAS)

A Debt Arrangement Scheme (DAS) lets you pay off your debt through a series of manageable instalments over a reasonable length of time.

Find out More
Business Debts
Icon Briefcase

Business Debts

Whether you are a sole trader or a limited company director, we can help you work through your current financial problems including money owed to HMRC

Business Debts

Our Insolvency Practitioners are regulated by ICAS or the IPA and our firm is authorised and regulated by the Financial Conduct Authority

Fees and Information: There are fees associated with our services. These will be fully explained before entering into any of the personal debt solutions referred to on this website. Full details of our fees and how these are charged are fully explained to you prior to you committing to any particular service.

ICAS Insolvency Practitioners