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Advice for consumers on recurring transactions

01 April 2011

A recurring transaction is one that is repeated on a regular basis, for example, people use them for monthly magazine subscriptions, gym or insurance cover, or to make a regular payment to an internet service provider.

You can set up a recurring transaction using your credit or debit card. This is a regular payment (other than a direct debit or standing order) which is collected from your credit card account by a third party in accordance with your instructions.

Recurring transactions have been around for many years and the vast majority of transactions work with no problems. However, you are very well protected if things go wrong.

Our advice is:

  • Always read the small print – make sure you know what you are signing up to and when payments are due.
  • Keep details of the retailer and the original transaction
  • If a recurring transaction is takes place but was not authorised by you, as the cardholder, at the time of the original transaction it is a fraudulent transaction. You should contact your card issuer immediately.

You can go direct to your card company and ask them to cancel a future recurring transaction.

If the disputed transaction has already taken place it is normally helpful to contact the retailer in the first instance to see if you can resolve the dispute. Any further disagreements – for example the retailer won’t refund your money or continues to draw money following the cancellation - contact your bank who may take up the dispute on your behalf.

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