What is a CPA?
A continuous payment authority, abbreviated to CPA, is one of the various collection methods used by lenders in order to collect payments.
At Multi Month Loans, we are credit brokers, not lenders, therefore we do not use or set up any Continuous Payment Authorities.
How do CPA’s Work?
To set up a CPA, your lender will ask you to provide your card details, as opposed to your bank details, as you would with a direct debit. Continuous Payment Authorities differ from direct debits, as companies whom you set up a CPA are allowed the flexibility to take and withdraw payments as and when they believe that you owe them money, as opposed to banks that debit the money from your account on a specific day for a particular amount.
Many borrowers dislike the flexibility of Continuous Payment Authorities, as they allow lenders to take money from your account without authorising the payment with you first. This does have the potential to leave you without any funds in your bank account if they take the money from your account when you cannot afford to make a repayment.
Continuous Payment Authorities are not compulsory, and you do not have to set up a CPA with a lender if you do not wish to, instead, you can choose an alternate payment method for your repayments.
Do I have the right to cancel my CPA?
Yes, you have the right to cancel your CPA if you do not wish to have one. You will, however, have to arrange alternative methods of payment in order to make your repayments, for more information try looking at our Payments and Charges page.
How can I cancel my CPA?
For most instances, you should be able to cancel your CPA by getting in touch with your lender directly. By law, lenders must ensure that they tell customers that having a CPA is not complusory and advise customers on how to cancel their continuous payment authority and set up another form of payment if they wish to do so in the future.
Alternatively, if you cannot contact your lender directly to discuss the cancellation of your CPA, then you are able to cancel the CPA directly with your card issuer who will be able to block the repayment method.
What do I do if the payments do not stop?
You'll need to ensure that the payments have completely stopped, so checking your next bank statement after you've cancelled will be an indication of whether or not they have abided to your request and terminated the continuous payment authority.
If they have failed to do so, then you can organise with your card issuer to receive a refund for the costs of CPA. If you repeatedly have repayments taken from your card despite cancelling with your lender and the card issuer, then you are able to issue a complaint with the Financial Ombudsman Service. For more information on how you can make a claim with the FOS, click here.