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Debit Cards

Question for Treasury

UIN 77446, tabled on 18 November 2021

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.

Answered on

23 November 2021

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.

Answered by

Named day
Named day questions only occur in the House of Commons. The MP tabling the question specifies the date on which they should receive an answer. MPs may not table more than five named day questions on a single day.