INDEPENDENT NEWS

Frustration Over Cancelling Recurring Payments Prompts Guide Update

Published: Fri 23 Sep 2022 09:41 AM
The Banking Ombudsman Scheme says more people using debit or credit cards for recurring payments for online subscriptions are experiencing difficulty cancelling payments, prompting it to update its guide on credit and debit cards.
Banking Ombudsman Nicola Sladden said the scheme had received numerous complaints recently from bank customers frustrated at their bank’s inability to stop recurring payments, most commonly for streaming services, anti-virus programmes and free or low-cost trials - the last of these often resulting in significant unexpected charges.
"Many people assume such payments are direct debits that can be cancelled by their bank, but they are actually authorised through the card provider - usually Visa or MasterCard - and are notoriously difficult to cancel without the co-operation of the company receiving the payments.
"Many people also think they can cancel their card or close their credit card account, and this will stop future payments. But this isn’t necessarily so because the authority remains valid until cancelled with the company. In addition, card providers’ rules allow a company to charge the customer even though the customer has cancelled the card or closed the account.
"The only way to cancel these payments is with the company directly. If it ignores the cancellation request, the bank can’t stop the payment - but it can recover it through a chargeback."
Chargebacks allow card providers to reverse payments if, among other things, a seller has debited an account after the customer has cancelled the service. Evidence of cancellation is generally required, so the Banking Ombudsman recommends keeping a record of the request.
See the revised Quick Guide to direct debits.

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