Charity warns against online payment scheme

Online credit card scam

Millions being snared by continuous payments scheme 

8th March 2016 by Robert Armour 1 Comment

Online traders are using dodgy tactics to lure people into subscriptions they don’t want – and can’t easily get out of, a Scots charity has warned.

A new report today by Citizens Advice Scotland (CAS) reveals that more and more people are being snared by continuous payments.

Run by the Continuous Payment Authority (CPA), these operate much like direct debits but differ in that they have few protections and allow companies to alter payments at their whim.

The CAS report, published jointly with its sister charities in England and Wales, found some companies hide key information about the deal before customers sign up. Some 84% of Scottish respondents said they didn't realise they had agreed to a subscription.

Young people are most vulnerable: 18-24 year olds are least likely to know what a CPA is, yet almost half have set one up in the past year.

Cancelling a CPA subscription is also problematic. CAS found that 81,000 Scots have been prevented from cancelling either by the company or by their bank – despite the fact that it is their right to do so at any time. 

Consumer spokesman at CAS, Fraser Sutherland, said: “Our research finds that one million Scots last year had reason to cancel a recurring payment, but many found barriers in doing  this – despite the fact it is their right. 

We want it to be easier for consumers to cancel recurring payments - Fraser Sutherland

“We want it to be easier for consumers to cancel recurring payments and we have called on the Financial Conduct Authority to make sure that both traders and banks play fair.

“We are also calling on social media firms and websites that advertise these companies to take these adverts down when they get complaints, and the subscription companies themselves must make it clearer that people are signing up to a subscription in the first place.

CAS says that consumers who shop online must be protected from traps which deliberately take advantage of them and advises anyone who uses the internet to read the small-print carefully so they know what they are signing up to.

Comments

8th March 2016 by Helena

And added to that con is that many who fall unwittenly into the trap are people with learning difficulties, young people who are in gaming sites etc. They can end up paying by the day, the money is just removed from their account. It is a scam that needs to be stopped. They do not realise the implications and that it is almost impossible to stop the payments if when they are not using the service anymore.