HANDS OFF OUR STOP THE MONEY!
Outraged readers back MoS campaign to tackle fees racket
THE Mail on Sunday has been inundated with support for our campaign to crack down on the continuous payment authorities racket. Scores of readers – most spitting feathers – have shared their shocking stories about a practice that leads to a staggering £ 7.5 billion a year being sucked out of customers’ bank accounts. Often victims are oblivious to the fact that their accounts or credit cards have been legally pickpocketed. More than 20 million people have been lured into taking out these pernicious plans in recent years – tricked by a slick sales pitch that explains the handing over of a simple credit or debit card number will make the whole payment process hassle free.
But the reality is that a continuous payment plan gives firms licence to help themselves to your money for ever. Unless you order the company or your bank to stop making the monthly payments ahead of the renewal date, they automatically get renewed – time and time again.
The service provider also does not need your approval if it decides to hit you with a nasty price hike. Worse still, continuous payments are not clearly marked on bank statements – unlike direct debits and standing orders – so they are easy to miss.
Among the top offenders are those offering magazine subscriptions, dating agencies, gyms and firms selling home and vehicle breakdown cover.
Leonie Yeates, of Wokingham in Berkshire, has fallen foul of the continuous payment authority tricks adopted by dating agencies – and warns others to be on their guard.
The 62-year-old copywriter says: ‘I signed up to dating agency Match. com – paying £169 from a credit card for six months of membership. At the end of this period I decided to let my membership lapse but then on my next bank statement I noticed yet another £169 had disappeared.’
She continues: ‘I was cross that this was done without my permission and the firm was not apologetic. It simply responded by stating the onus was on me to cancel. I was unaware I had been put on an auto-renewal deal and I was not given the opportunity to tick a box confirming I understood what kind of deal I was entering into.’
Leonie was almost tricked by a similar ruse with a separate six-month membership taken out with agency Elite Singles late last year. She says: ‘This time I made sure automatic renewal was not ticked. But when I double-checked a month ago I found the settings had gone back to this method of payment so I had to change it again. You really do need to be on your guard because if you’re not, you will get charged again and again and there is little way out.’
Other readers are outraged about the way continuous payments are not clearly identifiable on card or bank statements – unlike a direct debit or standing order. As a result, they are not alerted to the fact that they are paying for something they might no longer need or has auto- renewed without them knowing. The Mail on Sunday believes all continuous payments should be marked as such with the auto- renew date given in the description on the statement.
Nollaig Doughan, a 60- year- old retired software engineer from Warwickshire, says: ‘I enjoy reading a variety of magazines but it is hard to keep tabs on when a subscription expires with a continuous payment authority. As a result, you are less
likely to cancel. For example, on bank statements the subscription is referred to as ‘media publishing’ rather than the name of the publication that I read. It means I am seldom reminded as to whether I want a magazine subscription to autorenew or be cancelled. The rules need to be tightened.’
Nollaig believes continuous payments should be clearly labelled on statements – the way direct debits and standing orders are.
Jeff Modett, from Lowestoft in Suffolk, stands four square behind our campaign. The 76- year- old retired company director says: ‘I had a continuous payment authority with home emergency cover provider HomeServe.
‘ My annual premiums were increased by £27 without me realising – it was only when I noticed the extra charge on my bank statement I discovered what they had done and immediately cancelled.’ He adds: ‘I fear such services prey on the most vulnerable in society. Those that do not regularly check their statements or who are too trusting are most likely to be victims of this sneaky cash grab.’
Only about a fifth of all customers realise there is any difference between continuous payment plans compared to a direct debit or standing order. One of the key problems with a CPA is that money is regularly taken from a credit or debit card – and automatically renewed so easy to forget about and not cancel.
In contrast, every time a service provider wants money from someone who is signed up to a direct debit it must ask the customer’s bank for permission when the payment is due. A standing order is a regular fixed payment taken from a bank account under an agreement set up by the customer with their bank – not the firm providing the service. It continues until the cus- tomer cancels or the standing order contract runs out.
HomeServe says: ‘All pricing and methods of payment are communicated to customers 28 days before renewal.’ Match.com says: ‘Subs c r i p t i o n s a r e a u t o mati c a l l y renewed for convenience. We reimburse customers where proof of cancellation is provided.’
Elite Singles says: ‘Subscribers are i nformed about automatic renewal and can cancel via the account page.’