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Written question asked by Chi Onwurah (Labour) on Thursday, 18 November 2021, in the House of Commons. It was due for an answer on Tuesday, 23 November 2021 (named day). It was answered by John Glen (Conservative) on Tuesday, 23 November 2021 on behalf of the Treasury.

Debit Cards

Question

To ask the Chancellor of the Exchequer, what regulatory protections are in place for consumers who have automated payments taken from payment debit cards; and for what reason those payments do not fall under the jurisdiction of the Direct Debit Guarantee.

Answer

A continuous payment authority (sometimes called a “recurring” or “automated” payment) is a regular payment, where a payer has given consent for a firm to take one or more payments from a customer’s payment account. These are often established to enable regular payments to be made for goods or services via a payment card – for example, for a magazine subscription – and are distinct from Direct Debits. A retailer or supplier is not permitted to take a recurring payment without authorisation from the cardholder.

The Payment Services Regulations 2017 provide for unauthorised transactions to be refunded immediately. The Financial Conduct Authority (FCA) has published advice to consumers about continuous payment authorities and their rights to cancel them. In its published guidance on the regulations, the FCA states that consumers have the right to cancel recurring payments at any time before the end of the business day before a payment is due to be made, and to obtain an immediate refund from their payment service provider if any future payments are debited from their account after they have revoked their consent.

Different payment schemes may offer additional protections to customers. The Direct Debit Guarantee is an additional safeguard for customers who initiate Direct Debits, and applies to all banks and building societies taking part in the Bacs Direct Debit scheme, operated by Pay.UK.

Secondary information

Type
Written question
Reference
77446
Session
2021-22
Related items
Debit Cards
Thursday, 2 December 2021
Written questions
House of Commons
Subjects
Consumers Payments Regulation Automation Debit cards
Link
View this Written question on www.parliament.uk