Use of continuous payment authority by payday lenders
24 August 2012
Continuous payment authority ( 42kb)
Citizens Advice made a detailed submission to Office of Fair Trading (OFT) supplementary consultation on Debt Collection Guidance’s section on the mis-use of continuous payment authorities. We will not reiterate this here. However Citizens Advice continues to see problems with the use of Continuous Payment Authorities (CPAs) by the Payday Lending industry and we believe urgent action must be taken by both the OFT and the Financial Services Authority (FSA) to ensure that payday lenders stop mis-using consumers’ debit and credit cards.
We remain concerned about lenders’ continued reliance on the use of CPAs to collect loans, seemingly regardless of the financial situation of the client or whether the client has been in contact with the lender to request an alternative repayment method or plan. The evidence provided here relates to incidents occurring in 2012, many of them in the last three months.