In summary

  • If a payday loan company keeps trying to take money from your account, this is known as continuous payment authority (CPA).
  • A lender isn't allowed to seek payment by CPA where it has reason to believe there are insufficient funds in your account or that this would leave insufficient money for priority debts.
  • If you want to cancel a continuous payment authority, you have the choice of either going to your card provider or the payday loan company.

Continuous payment authority

The customer charter published by the payday loan sector’s trade bodies states that members will ‘set out clearly how continuous payment authority works (if we use it) and your rights to cancel this authority so you can decide if this type of repayment is acceptable to you.’

The charter also promises that your lender will always notify you by email, text, letter or phone at least three days before attempting to recover payment using a continuous payment authority.

The Office of Fair Trading’s guidance on continuous payment authorities (CPAs) states that lenders shouldn’t seek payment by CPA where it has reason to believe there are insufficient funds in the account or that this would leave insufficient funds for priority debts or other essential living expenses.

Lenders also shouldn’t continue to use CPAs after you have informed them that you’re in financial difficulties and cannot afford to repay.

Speak to your lender

Unless they’ve made every attempt to contact you about the loan, lenders aren’t allowed to keep trying to collect the payment day after day or to try to collect part payments.

If you don’t reply to your lender though, and they don’t have any evidence that you’re in financial difficulty, they are allowed to try to collect the debt again by CPA. 

So it’s always best to speak to your lender as soon as possible if you know you can’t repay a loan.

If you don’t think your lender is treating you fairly, put in a complaint and, if necessary, take your case to the Financial Ombudsman Service (FOS).

Cancelling a CPA

If you want to cancel a continuous payment authority, you have the choice of going to either your card provider or the payday loan company – either of them has to act on your request.

It’s advisable to notify both parties, giving plenty of notice. 

Always cancel in writing, and keep proof of this correspondence. To avoid disputes send post via recorded delivery or emails with a read receipt.

Keep a copy of your contract as proof if you need to show what you agreed to pay, and how.

Cancelling through your card provider

If you have a dispute that your card provider refuses to deal with, refer to the Payment Services Regulations 2009, which requires financial providers to cancel existing recurring payments. 

Disputed sums must be refunded immediately.

If the card provider still refuses to resolve the dispute, write them a formal letter of complaint and tell them you'll refer your complaint to the FOS if its not satisfactorily dealt with. 

If the matter isn't settled within eight weeks, then you can take your complaint to the FOS. 

Ask for a refund of extra costs

If your card provider fails to cancel a CPA when you ask it to, under the Payment Services Regulations you can ask it to refund any extra costs you’ve incurred as a result, such as bank charges or additional credit card interest.

It’s worth remembering though, that even if you cancel a CPA with your bank this doesn’t mean you don’t have to pay back the money you borrowed from the loan company.

Speak to the payday loan company to discuss the best way to repay your debt and to negotiate a new repayment schedule.


Join our campaign
& help us reach 125,000 signatures

Two thirds of us think that companies use fees or charges to trick us into thinking that the cost is cheaper than it is. We're calling for all financial fees and charges to be upfront, fair and easy to compare. We want companies to take action and the Government and regulator to conduct a thorough review.
Find out more about Fees and charges on Which? Campaigns

Thank you for signing our campaign

Help us spread the word by sharing our campaign


Privacy Policy

Please tell us what you think of the Which? Consumer Rights website.

Your feedback is vital in helping us improve this site. All data will be treated confidentially. This survey will take approximately 5 minutes to complete.

Please take our survey so we can improve our website for you and others like you.