I can't cancel a recurring payment - what do I do?
I signed up for a service to manage my Twitter feed with a monthly fee, I want to cancel but they're not returning my emails and the bank says they can't stop the company taking money because it's a recurring payment.
What can I do now?
This is a common problem and one that is perpetuated by people and organisations that really should know better.
Let's be clear: card providers and banks can cancel recurring payments in fact they must when you have withdrawn consent for the cash to be taken.
Staff that say they can't do it are either being wilfully obtuse or are woefully misinformed.
How to stop recurring payments
1. Check what you agreed to
When an individual signs up for a recurring payment, also known as a continuous payment authority or recurring transaction, they authorise a company to take money from their bank account.
It really is that simple: once the company has that authorisation they can take payments whenever they please and for unspecified amounts.
To authorise recurring payments the company will have asked for the most prominent number on your card, the long one, and you may not have specified a date for the payment to come out.
If you signed up in another way - with a sort code and account number or a form to your bank, for example - you may have another form of regular payment on your hands: more on how to tell here.
Assuming you did sign up for a recurring payment, the next step is to...
2. Contact the retailer
As we said above, card providers can cancel recurring payments and must when the cardholder has withdrawn consent for the payment to be taken or didn't give it in the first place.
Let's just emphasise this again: the card provider must cancel when you have withdrawn consent for the payment.
The Financial Services Authority (FSA) is pretty clear when it says that the "bank or card issuer must then stop [the payment] - it has no right to insist you agree this first with the company taking the payments."
And, elsewhere, "it is not acceptable for the payment service provider to make withdrawal of consent dependent on notice having been given to the merchant."
However, it's still preferable to get in touch with the company first for two reasons.
First, you might be able to resolve the issue fairly easily which is always preferable.
Second, showing that you've made every effort to cancel with the company is highly likely to speed up the cancellation process with the bank.
This is very similar to the pattern we see again and again with section 75 refunds.
In law, section 75 makes the credit card provider and retailer equally liable in certain circumstances. In practice, few card providers will even entertain a claim until the cardholder has reached deadlock with the retailer.
Contacting the retailer and retaining records of that contact - especially the date you requested that the payment stop - is the pragmatic choice.
3. Go to the card provider - be firm
To cancel a payment, contact the card provider or bank via email, phone, letter or in person.
Name the company receiving the payment and any other information - such as how the payments appear on statements.
Tell the card provider or bank that the payments should be stopped immediately.
The bit of law you need is regulation 55 of the Payment Services Regulations 2009 (more on the specific clauses here) so quote that if necessary.
4. Last resort
If you are unable to resolve the issue with the bank eight weeks after you bought it to their attention you can take the case to the Financial Ombudsman service.
They are a free, fair resolution service and will be able to give you a final answer. Their site is here.
Recurring payments FAQ
Why do companies use recurring payments?
As we said at the top, recurring payments are simple.
Companies don't have to fiddle about with standing orders or direct debit mandates and consumers don't have to remember to pay.
Although we're focusing on the negative here, lots of legitimate companies use them.
However, the other reason that recurring payments have become so beloved of companies hawking everything from gym memberships to insurance cover is that they used to be relatively difficult to stop.
The company taking the payment had the final say on whether the payments would carry on.
If they refused to stop a payment, banks and card providers would merrily continue to allow them to withdraw customers' money.
Since the 2009 law change that's no longer the case.
Yet, in reality - as we've seen, these payments remain more difficult to cancel and open to abuses large and small.
For example, some companies automatically renew recurring payments unless the consumer actively tells them not to.
In theory that could be useful but many people have reported discovering companies had been taking cash for years for services like car insurance that they didn't use. Not so useful.
Should I avoid recurring payments?
In a word: yes.
Consumers should avoid recurring payments if they can and, instead, ask to make payments via direct debit or standing order.
If a recurring payment is the only option, check all the small print.
Though card scheme rules specify that companies should be clear about what they're offering in return for repeat payments, this is difficult to enforce in practice.
How can I tell it's a recurring payment?
Your bank will be able to tell you what type of payment has been taken. It's usually listed on your online banking next to the debit too.
As we said at the top, the dead giveaway that you've signed up for a continuous payment authority is that the company asked for the number on your card.
If they didn't, you may have signed up for regular payments via direct debit or standing order.
With a direct debit you will have been asked for your account number and bank sort code (the small numbers on your card) and to either sign or, online, tick a box authorising the direct debit mandate.
You probably also agreed a date for the regular payment to come out of your account.
Got a direct debit? That's much easier to cancel, they're covered by the bank guarantee scheme.
The agreement is with the bank rather than with the company providing the service so banks know they should cancel it when consumers make that request.
Get in touch with your bank and give them as much information as possible: your customer information as well as the amount and date the money came out of the account.
A standing order is the easiest to cancel of all.
In this case, you asked the bank for the payment to be set up and provided the company's bank details.
Usually, for example, landlords ask you to set up a standing order to pay the rent.
You have the right to cancel at any time by request.
Could it be fraud?
If payments are coming from your account and the company named on the transaction denies taking the money or won't get back to you, this may be fraud.
See our full guide to card fraud on this page for help.
What if I entered into a contract?
So far we've been describing a situation like this: you ask for a subscription to be cancelled, the company says 'nope' or nothing at all.
But what if they say: 'nope, you entered into a contract'.
If the company in question has been obtuse - that is, you didn't realise you were signing up for a contract - the UK Cards Association says that, "you will be able to get money refunded by your credit card company (be prepared to provide details) as it is not an authorised transaction unless the nature of the commitment was made clear to you."
If you didn't know it was a contract, it isn't binding.
If you knowingly signed up to a contract but want out you can still get your bank to cancel the recurring payment, that is your right, but you may still owe the company money and they can pursue you for it.
What do recurring payments have to do with payday loans?
Payday lenders often use the continuous payments authority system to take their loan payments.
This comes with all the usual problems of this form of debit - they can take different amounts at different times - and, generally, money will be taken from the last person to make a payment on the loan.
Friend and family members have reported being charged after making what they thought was a single payment for a loved one.
What do the Payment Services Regulations 2009 say?
On 1 November 2009, the Payment Services Regulations 2009 came into force.
Wow your friends and family (and your bank) by citing the specific parts that prove your right to cancel under law.
The law makes it very clear that card providers and banks have to stop recurring payments if requested to do so by their customers.
They also make it clear that the consumer can do this without having to inform the company who was taking the payments.
That's Payment Services Regulations 2009, regulation 55 parts 3 and 4.
The law also specifies that card providers and banks that fail to obey their customers' instructions must refund any payments that occur after the request.
Any fees that may have been incurred must also be refunded.
That's Payment Services Regulations 2009, regulation 61.
Those are the main parts you can use. The actual legislation is available here but, be warned, is extremely difficult to decipher for anyone not fluent in legalese.
What about agreements made before 2009?
It might be the case that you gave a company your details before late 2009 - does that mean the law doesn't apply?
Not a bit of it. The important part is that you asked the company to cancel the recurring payment on or after 1 November 2009.
If the company did not comply, your bank must stop the payments.
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