CPA, which stands for Continuous Payment Authority is a type of automatic payment. Many payday lenders set it up on your bank account when you take out a loan with them and if they do it basically allows them to take money out of your account whenever they want. Usually they’ll use it to collect the repayment of your loan on it’s due date, but if you’re unable to repay it then they’ve been known to use it to make several attempts to pull the funds from your account. They can take payments for different amounts and they can take payments as and when they please, so let’s say for example you’re loan repayment was £125 but you didn’t have enough to repay it, they might decide to use the CPA to try and take £10 from your account each day until the amount is repaid.
Unfortunately though each time they make an attempt to take the money if you’re bank account has insufficient funds then the payment will bounce and your bank will most likely issue you with a charge. Since you’re already shot of cash and struggling to repay your loan the last thing you want is to be faced with additional charges from the bank making the situation even worse. If you are aware that you are going to struggle with your loan repayment then it’s a good idea to cancel this Continuous Payment Authority before they attempt to take payment as mentioned here.
You have 2 options for cancelling CPA, you can either contact the company directly and ask them to cancel it or you can go the bank and do it yourself. If you do decide to go to the bank and cancel it at your end then it’s recommended that you let the company know what you’ve done in case you have to make further payments as they will need to know how you plan on repaying them. Similarly if you contact the company and ask them to cancel it they may tell you that you can’t, however it is your right to cancel it directly with your card issuer so make sure you let them know that.
If you cancel CPA then it will stop automatic payments being taken from your account, however should any money come out after the date you cancelled CPA then it will be classed as an unauthorised transaction and you should be able to get a refund from your card issuer.