Credit cards for payment. Photo: 123RF
Consumers are complaining about the difficulty in cancelling recurring debit or credit card payments.
Banking Ombudsman Nicola Sladden said the scheme had received numerous complaints from customers frustrated with their bank's inability to stop recurring payments, most commonly for streaming services, anti-virus programmes and free or low-cost trials.
Banks could only cancel payments made via direct debit, but not recurring payments made with credit or debit cards.
"The only way to cancel these payments is with the company directly," Sladden said.
Evidence of cancellation was generally required by the bank, so consumers would need to keep some record of cancellation.
"If a company does ignore that cancellation request, the customer's redress is with the company, the bank can't stop the payment but in some circumstances it can recover it through a chargeback," Sladden said.
Many people wrongly believed they could stop future payments by cancelling their card or closing their credit card account.
Sladden said card providers' rules allowed a company to charge a customer even though the customer had cancelled the card or closed the account.
"The authority remains valid until cancelled with the company."
Chargebacks allowed card providers to reverse payments after the customer had cancelled the service.