Could Recurring Payments Prompt You to File an Auto Renewal Lawsuit?

Auto renewal lawsuits have been on the rise recently and part of this is due to customers being aware of the dangers of recurring payments. Recurring payments are not always easy to find, making it harder to cancel them effectively.

In certain states, such as California, auto renewal practices must be fair as well as clearly disclosed to consumers to allow them to make informed decisions about the companies they do business with.

How to Spot Recurring Payments

Recurring payments may also be referred to as continuous payment authorities. They seem the same as direct debits from your account but they are not.

Some consumers allege that these recurring payments allow businesses to take out money whenever they believe they are owed and it’s vital to know whether or not you are within your rights to cancel and whether or not you can switch to a true direct debit situation. Payday lenders, subscription websites and other businesses use recurring payments.

Only the business could cancel these recurring payments until 2009 and consumers were not able to do it. You, however, now have a right to cancel due to auto renewal laws that protect consumers.

A continuous payment authority or continuous and recurring payment is any situation in which you provide a company permission to take money consistently from your credit or debit card whenever they feel it is owed to them.

The key for recurring payments or these CPAs is that the company will request the full number across your debit or credit card, instead of your bank account number or an appropriate code. This recurring payment could be a big problem if you are not sure of what you’re signing up for and if you don’t know how to cancel.

Continuous payment authorities can be very challenging to spot as they aren’t often listed directly in this manner. It is a permission to allow these companies to regularly take payment whenever they want to so it can look like any other charge on your statement. However, putting some time into evaluating these payments can help you identify situations you don’t want.

Check statements on your debit and credit cards to identify what’s coming out regularly. Anything that is not listed as a direct debit or a standing order is a continuous payment authority. Any regular payment paid by your credit card is a continuous payment authority since you can’t set up any other type. Typical recurring payments include gym memberships, cable TV subscriptions, phone subscriptions, online DVD rentals and pay day loan repayments. These can be especially difficult to cancel.

It only takes one minor glitch in the situation for this to become a nightmare. Make sure that you take every opportunity possible to switch to direct debit rather than recurring payments. This step alone can help you avoid catastrophic problems and issues.

Consulting with an experienced attorney if you have already been subject to illegal auto renewal practices is very important for protecting your rights- contact the team at Bradley/Grombacher today to learn more.