If you are struggling with Payday Loans and can no longer afford the repayments, in order to stop payments being taken you should cancel the Continuous Payment Authority the lender will have set up against your debit card.
Continuous Payment Authority is basically the permission you granted to allow the lender to debit your account.
If you are looking at setting up an arrangement to pay, you should cancel the Continuous Payment Authority in the first instance. Continuous payment Authorities are covered under the Payment Services Regulations 2009. Essentially these lay out how payment service providers from organisations such as banks, credit card companies etc should operate payment systems.
In a nutshell you are able to withdraw the permission you gave for payment or a series of payments that would otherwise be collected from your debit card.
Cancelling Continuous Payment Authority
The most important step is to email the payday loan provider to tell them you are withdrawing your permission for them to take payment from your debit card.
You should also contact your bank to tell them the same (although I have never done this but you should to make sure you don’t have any problems).
An example of an email I sent to a Payday Loan Lender
Below is an example of a full email I sent to a payday loan lender. Not only does it ask for Payment Authority to be withdrawn, it also asks to set up an arrangement to pay.
Dear Sir or Madam,
I am writing to advise that I will not be able to make the contracted repayment on the 31st August 2017. This is due to a change of circumstances.
Rather than ignore this issue I would prefer to get a repayment plan in place so I can pay back what I owe.
Please would you consider suspending any further interest and charges that may be added on as a result of my failure to meet the contacted repayment?
I can offer 40 pounds per month and have attached a copy of my income and expenditure form.
Please note that with immediate effect, I withdraw my authority for all future payments to be debited from card number ending 1234.
Please send me details of how I can make payment by standing order.