Don't get into a CAT flap

CREDIT card holders should think twice before arranging a debit on their card. This is because the debit arrangement, or Continuous Authority Transaction (CAT) as it is correctly known, can only be stopped by the supplier, the person or organisation receiving the regular payment.

This was discovered recently by Barry Dixon, of Hertfordshire, who wanted to cancel a CAT on his TSB Visa Trustcard.

He had subscribed to the Sky movie channels for a period of one year and decided that he no longer wanted the service. He wrote to Sky to cancel the subscription and decided to tell TSB Trustcard to make sure that the CAT was stopped.

He rang Visa and discovered that he had no power to stop the CAT and cancel the debit on his card. Even if he closed the account and chopped up the card the CAT would continue, as only the supplier can cancel the debit.

The arrangement compares unfavourably with a bank direct debit, where if you write to your bank asking to cancel the debit it will do so. The bank also agrees to return any money in the event of a withdrawal after the debit has been cancelled.

Mr Dixon has no complaint against Sky, but was concerned that the arrangement left him potentially at risk from unscrupulous suppliers. His worries are echoed by Richard Tyson Davies, of the Association of Payment Clearing Services, the organisation that operates the bank clearing system.

Mr Tyson Davies warns people to think very hard before authorising a CAT because it is impossible to 'block a debit' without consent from the supplier. He feels the misunderstanding 'blackens the name of the direct debit'.

Midland Bank suggests that cardholders should keep photocopies of any letters they have sent authorising retailers to debit money from the card account.

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