BBC Business reports that two of the UK's biggest banks have admitted denying some customers their right to cancel recurring payments.But since 2009, banks have been legally required to cancel CPAs when a customer asks. Customers seeking to cancel continuous payment authorities (CPAs) have been told by banks such as Lloyds TSB, Bank of Scotland and Santander that only the payee can agree such action.
The new rights were enshrined in the Payment Services Regulations, which came into force in November 2009, but have been subject to ongoing discussions between the banks and the Financial Services Authority (FSA).
Mike Dailly, a consumer lawyer at the Govan Law Centre, who also sits on the FSA's Consumer Panel, told Radio 4's Money Box programme that the obligations for banks were clear. "You have the right to cancel one of these continuous payment authorities and you can go to your bank, they can't put up any hurdles," he said.
"They should have a simple procedure for you to do that. You don't have to have the permission of the payee."
Mr Dailly said he has experienced a problem when trying to help a client who banks with Bank of Scotland, also now part of the Lloyds Banking Group:
"I can think of a case of a pay-day loan company where the consumer was paying that through one of the government schemes yet the pay-day loan company is still taking money from the person's account”.
"Now that person went to the Bank of Scotland and asked for them to cancel the CPA and they said 'You can't do it. You need to get the permission of the pay-day loan company.' Now, that's wrong in law."
