Continuous payment authorities (CPAs) explained

A continuous payment authority (CPA) is a type of payment method used by merchants to withdraw money from your credit or debit account on a recurring basis. You have to give permission for payment to be taken. CPAs are typically used by subscription services as well as gyms, membership websites and payday loan companies.

If you see a CPA on your bank statement, you might think it’s a direct debit, but as you’ll find out on this page, CPAs are actually different from direct debits. Read on to find out what continuous payment authorities are, how they work, why you may want to avoid them and how they may affect your credit and debit card transactions.

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The rundown
  • A continuous payment authority is also known as a recurring payment 
  • CPAs are widely used by businesses like gyms and subscription services to take money from your account on a regular basis
  • Before committing to a CPA, it’s important to research what you’re signing up to, so you avoid falling victim to a costly subscription trap

What is a continuous payment authority?

A continuous payment authority (CPA) is a type of recurring payment that allows a company to take money out of your account if you have given them your debit or credit card details. Streaming subscription services like Netflix and Amazon Prime tend to work in this way.

Setting up a CPA doesn’t just give a company permission to take one payment, you’re permitting them to take a payment from your account whenever they think you owe them money. A CPA doesn’t enable a company to fraudulently withdraw money from your account, and you’re still entitled to challenge a withdrawal if you think it’s incorrect.

What does continuous payment authority mean?

In basic terms, a continuous payment authority is an instruction you have given to a service provider which enables them to take a regular payment from your bank account or credit card.

How do continuous payment authorities work?

You’ll recognise a CPA because a company, such as a subscription or membership service that you’ll typically pay for monthly, will ask for the long number on the front of your credit or debit card rather than your bank account details. This can be done over the phone, in an app, in person or online, and there’s often no written record of your permission to set a CPA up. Once you have provided your details, you’ve authorised a CPA, and the company you’ve set your CPA up with can take money from your account when they need to, as per your agreement with them.

Why is it best to avoid CPA payments?

The main reason you may want to avoid CPA payments is because, unlike direct debit payments, they’re difficult to cancel. While many companies legitimately use CPAs, some don’t, and you may fall into a subscription trap. It’s always best to research the company before you sign up to anything and share your financial data.

What’s a subscription trap?

A subscription trap is when you sign up for a subscription, typically through a special offer such as a free trial or a reduced price, and if you don’t cancel your subscription after a set time, you’re automatically transferred onto what can be an expensive subscription plan.

The graphs below, from the Citizens Advice Bureau, illustrate how it’s possible, how easy, and how costly it can be to fall into a subscription trap.

How it’s possible to fall into a subscription trap: you don’t read or understand the subscription’s T&Cs

The reasons why consumers didn’t read the Ts&Cs. Source: online survey of 496 people affected by subscription traps conducted between July and October 2015 (chart based on responses of 127 consumers who told us they hadn’t read the Ts&Cs)

The three main reasons why consumers didn’t understand the Ts&Cs. Source: online survey of 496 affected consumers conducted between July and October 2015 (chart based on responses of 229 consumers who told us why they read the Ts&Cs but didn’t understand them)

How costly it can be to fall into a subscription trap

Amounts of money consumers lost to subscription trap problems. Source: online survey of 496 people affected by subscription traps conducted between July and October 2015 (chart based on response of 467 consumers who told us how much money they had lost)

Can I stop a continuous payment authority?

To cancel a continuous payment authority and get a refund, you can either contact the company directly or ask your bank. Asking your bank to cancel a CPA will require them to take action immediately, but they will have to make sure you don’t have an outstanding balance with the company, you haven’t signed up to a fixed term contract, or the payment was unauthorised before they can give you a continuous payment authority refund.

If you’re thinking “if I cancel my debit card, can a company still take my money?”, unfortunately, the answer is “yes”. Cancelling your debit or credit card won’t necessarily stop your CPA payments. You can also still be charged if you have an expired card. It’s best to take an active approach in cancelling a continuous payment authority by contacting the company or your bank.

How might continuous payment authorities affect my credit or debit card transactions?

Continuous payment authorities can affect your credit or debit card transactions in a couple of different ways. Credit card CPAs will result in incurring more debt, and you might unexpectedly go over your credit limit if a payment is taken when you’re not expecting it.

If you have CPAs set up on your debit card, they can be a nuisance especially if you are low on funds and an unplanned payment is taken from your account.

Plan for the future by growing your savings

Planning for unexpected payments will help keep your finances healthy, but it’s also important to grow your savings. At Raisin UK, you can apply for savings accounts from a range of partner banks in one place. Register for a Raisin UK Account to apply in a few clicks, view all your savings accounts in one place and easily fund accounts from different banks.

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