Direct debits and continuous payment authorities
What are standing orders, direct debits and continuous payment authorities?
Standing orders
A standing order is an instruction you give to your bank to pay a recipient a set amount at regular intervals. This can be until further notice or for a limited period of time. If you want to make any changes to the standing order or cancel it, you have to do this with your bank, not the recipients of the payments.
Direct debits
You set up a direct debit with the business you want to make regular payments to. They then tell your bank about the permission you’ve given them (the ‘direct debit instruction’) and collect payments from your account as and when they’re due. The instruction holder can make changes to the payments they collect under the arrangement, provided they tell you first.
If you make payments by direct debit, you’ll be protected by the direct debit guarantee. This means that if the bank or instruction holder makes a mistake with the payment of a direct debit, the bank must refund you.
Continuous payment authorities
A continuous payment authority (CPA) is a recurring payment that a business sets up on your card account using your debit or credit card details. As part of the set-up process, the business should get your permission (‘standing authority’) to take payments as and when they’re due. You can cancel a CPA by contacting the business receiving the payments or the card provider.
Types of complaint we see
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Most of the complaints we see are either that the current account provider has paid a direct debit or standing order it shouldn’t have done – or has failed to make a payment that was due.
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Consumers sometimes complain about difficulties in cancelling a CPA, either with the business taking the payments or with the card provider.
Alternatively, they may complain about the CPA itself. For example, they may say that they:
- didn’t give permission for a CPA to be set up on their account
- were unaware they were entering into a CPA agreement – this sometimes happens when signing up to a ’free trial’ offer
- didn’t agree to the amounts or frequency of the payments
- didn’t agree to renew the agreement after a fixed term
What we look at
To help us consider a complaint fairly, we’ll ask you to provide some information. We’ll make our decision about what happened using evidence provided by you, the bank and any relevant third parties. In reaching a decision, we consider:
- the relevant law
- any regulations that applied at the time
- any industry codes of conduct in force at the time
- the terms and conditions of the account that the disputed transaction was made from
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We’ll usually look at:
- your bank’s electronic records to check if there has been an error
- your account’s terms and conditions
- any discussions you had with your bank about the payments
- the money (or credit facility) available, in the account at the time
- the terms of the direct debit guarantee, if relevant
- what your bank has already done to put things right
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When assessing whether your card provider has done something wrong, we’ll usually take into account:
- how the CPA was set up
- any discussions you had with the card provider about the CPA
- your card account’s terms and conditions
- any relevant laws and regulations
- what you card provider has already done to put things right
If you asked the card provider to cancel your CPA, we’d expect to see that they:
- did so without unnecessary delay
- refunded any unauthorised payments (but be aware that if a business has started the process of taking a payment, it’s too late for you to cancel a CPA to stop this payment from being authorised – only payments taken after this will be unauthorised.)
If your complaint is about the CPA itself (for example, that you didn’t give permission for it), we’ll look at how it was set up. If the evidence shows that business didn’t get your informed agreement, then we’ll consider the CPA to be unauthorised. In this case, we’d expect your card provider to refund any payments.
We may be able to look into a complaint about the business that set up the CPA, but only if it’s a provider of financial services (for example, a ’payday’ loan provider or an insurer). Otherwise, we’ll try to direct you to someone who can help you.
See also our guidance on disputed transactions.
How to complain
Talk to your bank first so that they have the chance to put things right. They need to give you their final response within 15 days for complaints about payment services. If you’re unhappy with their response, or if they don’t respond, let us know.
We’ll check whether your complaint is something we can deal with. If it is, we’ll investigate to understand what happened and what went wrong.
Find out more about making a complaint.
Putting things right
If we think your bank has done something wrong or treated you unfairly, we’ll ask them to put things right. This will depend on the individual circumstances and how you've been affected – it could include:
- refunding any unauthorised payments
- refunding charges and interest your bank has applied to your account as a result of unauthorised payments or an error with a direct debit payment
- compensating you for any losses you’ve suffered, like a charge for a late payment or loss from missing a payment
- compensating you for any distress and inconvenience you’ve suffered
Case studies
A customer complains about a bank failing to cancel a direct debit
Banking Direct Debits
Detailed advice for businesses
Businesses can read more detailed advice on handling complaints about:
