What continuous payments are draining your account?
It’s hard to tell and even harder to stop – that’s why the MoS demands action
THE world’s leading technology giants are enjoying a profits bonanza as a result of lockdown and a boom in internet shopping and home entertainment. But some are routinely exploiting customers by getting them to s e t u p c o n t i n u o u s p a y ment authorities to pay for their products and services. These allow the companies to continue to take payments from customers’ debit or credit cards until the instruction is cancelled.
Inertia means many people fail to cancel, even when they no longer want the service – or when the payment is ratcheted up.
Amazon, Apple, Netflix, Now TV and Spotify are among those companies that have aggressively embraced this payment method.
Even Transport for London uses it to top up travellers’ Oyster cards. The payments are hard to spot on a bank statement because unlike direct debits and standing orders, they are not marked as a regular transaction.
The Mail on Sunday has long called for a tightening up of the rules governing continuous payments. We believe letters, texts or emails informing customers of an impending automatic renewal date should be sent a month beforehand. This correspondence should also remind customers of their right to cancel.
Consumer groups continue to back our call for a hardening of the rules. James Daley, founder of consumer website Fairer Finance, says: ‘We desperately need new rules to make it just as easy to cancel a continuous payment authority as it is to take one out.’
He adds: ‘Providers such as Amazon Prime make it simple to sign up to a continuous payment, but when it comes to cancelling, it is far more difficult. Sometimes, it feels like you must draw up a request in blood before some companies will allow you to escape their clutches.’
Salman Haqqi, finance expert at website Money. co. uk, says: ‘ The rules must be tightened. Consumers need more protection to stop companies leeching off t hem by t aking unwarranted payments. They should always send autorenewal notifications and give customers the ri ght t o choose other p a y me n t methods such as direct debits.’
There are now more than 15 million UK Amazon Prime customers in the UK while at least two million have signed up to Prime Video since the first lockdown last March. Almost all customers pay using a continuous payment authority. Amazon Prime states: ‘We don’t accept... direct debits or standing orders.’
Cancelling requires careful negotiation of an online maze. Customers must log in, then go to ‘manage membership’ before pressing ‘cancel membership’. It then urges the customer not to leave by offering the choice of a ‘remind me later’ as well as ‘I want to keep my benefits’. You must ignore these and press a third choice ‘I do not want my benefits’ to leave.
Amazon told the MoS: ‘The Prime sign-up process is clear and transparent. Members can cancel a subscription at any time – with a few clicks online, a quick phone call or by turning off auto renewal. We explain that the annual membership renews automatically when a customer enrols.’ Most of Netflix’s 15 million subscribers in the UK pay via a continuous payment authority. It did not reply to our request for a comment but it does offer alternative payment options, such as the purchase of a Netflix gift card prior to signing up.
This month, Netflix is hiking charges on standard contracts set up on a continuous payment authority – from £8.99 to £9.99 a month.
Apple also prefers to take continu o u s p a y ment s although cancelling is straightforward. Customers go into settings, press ‘ Apple ID’, scroll down to ‘subscriptions’ and then click on the cancellation option. Spotify is another company keen to push its ‘premium’ music listeners on t o a continuous payment authority. But it states: ‘We do also accept prepaid cards issued by Visa, Mastercard and American Express.’
Sky TV has nine million subscribers, plus two million customers signed up to its Now TV service. Anyone buying a Now TV pass takes out a continuous payment authority, but Sky TV also takes payment via direct debit.
Banks can help track down continuous payments. NatWest says: ‘We provide a free financial health check for customers where we often uncover continuous payment authorities for services no longer being used.’
On Friday, the Financial Conduct Authority said: ‘Before entering into an agreement a firm must provide an explanation of how a continuous payment authority works – including how it can be cancelled.’