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"Advice given over recurring repayment to consumers"

By admin | December 30th, 2009 | Credit Cards

One problem that often affects plastic cardholders these days is the problem of recurring payments, which are payments that are taken from the card on a recurrent basis such as subscriptions and memberships.

Whilst these recurring payments are fine as long as the cardholder wants them to be going out and is still receiving the service that he or she is paying for there are often issues when the service has been cancelled but the company continues to take money from the card.

Industry officials have said that under current banking rules banks have no responsibility for recurring payments that are coming off a consumer’s card, and because the bank can not do anything about these repayments the issue can become very distressing for the cardholder.

Payments start going out as the result of a contract between the cardholder and the service provider, where the company takes the long number from the front of the card. However, stopping payments can often be very difficult.

The banking industry has said that it has now involvement with these contracts, and therefore it is not able to intervene to stop the payments. Instead, bank officials advised that consumers need to contact the company directly and advise them to stop taking payments from the card if the cardholder is no longer receiving the service. If necessary this should be backed up in writing, with the letter being sent recorded delivery and proof being kept by the cardholder.

Although some companies will stop taking payments once the request has been made by the cardholder, this is not always the case, and many cardholders have had payments taken out of their accounts for many months following a request to stop.

Sandra Quinn from APACS said: “The bank isn’t involved in these payments; it’s the company you’ve got a contract with. So that’s who you have to cancel it with and you have to rely on them following your instructions.”

Tags: Sandra Quinn, credit card, Electronic funds transfer, Payment, apacs, Payment systems

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