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Commissions

[If you do not undertake any regulated consumer credit lending or credit broking activities, delete this section].

The company confirms that where we receive a commission or fee from a lender as part of our credit broking service, that we duly disclose this to a customer prior to any credit agreement being made where knowledge of the existence or amount of the commission could actually or potentially: –

  • affect the impartiality of the credit broker in recommending a particular product
  • have a material impact on the customer’s transactional decision

We ensure that any lenders with whom we have a working relationship, provide us with an Introducer Agreement which also contains clauses relating to our disclosure of commissions and fees to customers and that we comply with any such agreement and the regulatory requirements under CONC 4.5.3 of the FCA Handbook.

21.13 Continuous Payment Authorities

A Continuous Payment Authority (CPA) is a regular, automated payment that is set up from a customer’s debit or credit card which is linked through to their bank or credit card account. the company offers its customer the option to make payments using CPA and understand the need to be open, honest and transparent about these payments so that customers do not get the rights they have under a CPA confused with other payment types such as Direct Debits or Standing Orders.

We have strict and clear procedures and staff guidance in place not only to ensure that we comply with the regulatory requirements on the use of CPA’s, but also so that we can provide a fair and clear service to our customers.

Our procedures cover all the requirements for disclosing, setting up, altering and cancelling CPA’s and provides our staff with their obligations when offer CPA as a payment option.

21.13.1 CPA Policy & Procedures

1) Policy Statement

Continuous Payment Authority (CPA) transactions are a form of regular payment where a customer’s debit card is used to set up one or more payments to an organisation. As this form of payments offers more flexibility to the firm taking the payment, it can lead to uncertainty and confusion for the customer on how, when and why payments are being taken.

This policy addresses how the company handles CPA transactions and how we provide clear, transparent and fair information to customers regarding the use of CPA and how it affects them. This policy has been created to protect the customer and to offer understandable guidance on the use of CPA’s and how to cancel them. Written and verbal methods of communication will be used to ensure that a customer’s understanding of CPA’s is correct.

This policy has been created to meet the requirements and rules of section CONC 4.6 of the Financial Conduct Authority (FCA) handbook, which details how Continuous Payment Authority (CPA) transactions should be handled and how customers should be made aware of such methods of payment.

2) Purpose

The purpose of this policy and procedure document is to ensure that the company complies with its obligations under the FCA and acts in a fair, transparent and consistent way with regards to customers who use a CPA as a method of payment. This policy protects the customer from unfair business practices or undue stress and also provides clear guidance for staff on how CPA’s are used and what they do.

The company have put measures and controls into place to help customers to understand the process of a CPA and also the consequences when payments have been missed. We have also provided clear written guidance for customers and staff on setting up a CPA, what happens for the duration of a CPA and how to cancel a CPA.

3) Scope

The policy relates to all staff (meaning permanent, fixed term, and temporary staff, any third-party representatives or sub-contractors, agency workers, volunteers, interns and agents engaged with the company in the UK or overseas) within the organisation and has been created to ensure that staff deal with the area that this policy relates to in accordance with legal, regulatory, contractual and business expectations and requirements.

4) What Is CPA

Continuous Payment Authority (CPA) transactions are a form of regular payment where a customer’s debit card is used to set up one or more payments to an organisation. CPA differs from a standing order or direct debit in that payments can be for a fixed or variable amount and CPA offers less protection for the customer in that it gives the organisation more flexibility in collecting payments (e.g. if one or more payments are missed due to lack of funds, a CPA can take all arrears payments at once or if funds are not available the CPA will continue to try and take the money from the bank until it becomes available.)

With less protection for the customer and more flexibility for the business, it is important to ensure that the customer is fully aware of the agreement they are entering into and what, how and why a CPA works. It is also essential to provide information on cancelling a CPA and to make this information clear whether by verbal or written communication.

Section CONC 4.6 of The Financial Conduct Authority (FCA) handbook has provided clear rules on the disclosure of CPA’s and how it expects firms to provide clear policies and procedures in this area.

5) Objectives

Regarding CPA transactions, the company’s aim is to meet the below policy objectives at all times and to remain compliant with regulatory standards whilst providing the customer with a fair, clear, and transparent service.

the company’s objectives for dealing with Continuous Payment Authority transactions: –

  • Clear procedures for informing the customer verbally and in writing about CPA.
  • Ensure CPA policy, procedures, training material and written material complies with CONC 4.6 of the FCA handbook.
  • Make the customer aware of alternate payment options.
  • Give the customer the choice of an appropriate due date for payments to be taken.
  • Advise the customer of the consequences if sufficient funds are not available on the payment due date.
  • Advise the customer if it is the firm’s policy to attempt further collection of payments if the first fails, and is yes, what is the frequency and process for subsequent payment collections.
  • Advise the customer if multiple payments can be taken in one go should there be arrears on the account.
  • Advise customers whether default fees and/or interest may be added to the account in the event of non-payment, and if so, what charges may apply.
  • Ensure staff are fully trained on CPA’s and have scripted material available as reminders.
  • Once set up, ensure that no CPA is amended without first obtaining the customers consent and providing them with a full and genuine reason for the amendment.

6) CPA Procedures

[If you already have existing CPA procedures, insert them here, otherwise you can use and implement the below procedures.]

6.1 Setting up A Continuous Payment Authority

Whenever a CPA is used as a form of payment, staff must relay to the customer the below points regarding the transactions. If the customer is dealt with via telephone of face-to-face, then a written letter should follow the repayment set-up, reiterating the process, actions and possible consequences of having a CPA and advising the customer on how they can cancel the CPA with you or the bank.

Once the CPA is set-up, staff will advise the customer: –

  • How much is to be taken on each payment date (if variable, this must be explained)
  • When the agreed payment date is (alternatives should be offered during CPA set-up)
  • How long the repayment schedule has been set-up for (calculate payment amount/account balance = number of payments)
  • What name/reference will appear on the customer’s bank statement
  • What happens on Weekends and Bank Holidays?
  • What the consequences are if funds are not available on the payment due date
  • If re-collection of missed payments will occur, and if so, the duration and frequency of tries
  • If account arrears can all be collected in one go should payments be missed
  • If any charges will be applied to the account in the event of default
  • How to cancel the CPA with either the firm or the bank?

6.2 Written Notification

Once a CPA has been set-up with a customer, an automated letter must be sent reconfirming the details of the CPA and reiterating the points mentioned in 6.1. This letter should also be made available in large print and Braille and where possible, a copy of the firms CPA guidelines should be made available via the website for customers to view or download.

6.3 Missed Payments

As soon as a payment has been missed on an account where a CPA is set-up, the customer should be contacted both verbally and in writing so that the consequences of defaults can be reiterated. It is important to notify the customer at this stage that all missed payments may be collected in one go as soon as funds become available in their bank account.

Alternate payment options should be given to customers on a CPA where payments have been missed and the opportunity to cancel the CPA should be provided and an alternate repayment method set-up.

6.4 Cancellation

The company ensures that there are no barriers for a customer to navigate when wanting to cancel a CPA. We will provide clear communication options in all written and verbal communication with the customer, including: –

  • Full postal address
  • Telephone numbers
  • Email address
  • Point of Contact for CPA cancellation

7) Financial Difficulty

If payments are missed on an account or it becomes apparent that the customer is experiencing financial difficulties, staff will cease from trying to collection the payment and refer to the Arrears Policy & Procedure and follow the steps contained therein.

The initial agreement made under the Continuous Payment Authority is to be void if it becomes clear that the customer is in financial difficulty and cannot repay the monies owed. In this case, it is the firm’s aim to reassess the payment arrangement to ensure that a suitable and affordable alternative is put into place.

8) Responsibilities

8.1 the company will ensure that all staff are provided with the time, training and support to learn, understand and implement the CPA Policy and Procedures and the related Arrears, TCF and Vulnerable Customers policies and procedures. Management are responsible for a top down approach and in ensuring that all staff are included and have the support needed to meet the regulatory requirements in this area.

8.2 The Compliance Officer and line managers are responsible for monitoring accounts that have a CPA set-up on them and for performing regular call monitoring and account audits to ensure that verbal and written communication with the customer follows the rule and guidance provided in this document.