VIDEO- Explains standing orders and direct debits. Contains all the IMPORTANT FACTS.
- Direct Debits give a company permission to take money from your bank account on an agreed date.
- Standing orders give the bank an instruction to pay an exact amount to another account regularly.
IMPORTANT FACTS- Continuous Payment Authority (CPA)
- A continuous payment authority is a type of regular automatic payment that can be set up using your debit or credit card.
- Important fact is that these authorities don’t have the same guarantees that a direct debit has regarding the date or the amount of the payment! And they can be tough to spot, as they aren’t listed as continuous or recurring payment.
Typically CPA is set up for:
- Payday loan repayments
- Online DVD rentals
- Gym memberships
- Overseas newspaper subscriptions
- Telecoms – including mobile phone or cable TV subscriptions
How do they work?
The authority to take off the payment is linked to the bank account or credit account the card is linked to. This way of payment is set up by giving debit or credit card details to a company to which regular payment will be made to. However there is often no written record of the authority being set up.
A continuous payment authority gives the company that is paid via CPA the mandate to:
- Take payments on dates of their choosing
- Take payments for different amounts
Therefore it is important to keep a close eye on the bank statement to ensure that all payments are correct.
- CPA’s can be cancelled by telling the company or the bank.