Key Information

Speeches by Speaker
Norman T.L. Chan
Peter Pang
Eddie Yue
Arthur Yuen
Zeti Akhtar Aziz
Raymond Li
Edmond Lau
Esmond Lee
Meena Datwani
Vincent W.S. Lee
James Lau
Joseph Yam
Y K Choi
William Ryback
David Carse
Tony Latter
Andrew Sheng
Hans Genberg
Simon Topping
Michael Taylor
The Honourable Donald Tsang
Chen Yuan
Dai Xianglong
Don Brash
Jaime Caruana
Andrew Crockett
Mario Draghi
David Eldon
Stanley Fischer
Timothy F. Geithner
Stephen Grenville
Kenneth G. Lay
William McDonough
Ernest Patrikis
Glenn Stevens
Jean-Claude Trichet
Tarisa Watanagase
Zeti Akhtar Aziz
Carmen Chu
Alan Au
Press Releases
Press Releases by Category
Bogus Voice Message Phone Calls
Banking in Hong Kong
Fraudulent Websites, E-mails and Telephone System, and other fraud cases
Granting of Banking Licences
Exchange Fund
Table of Multiples of Notes and Payments for Allotted Amount under non-competitive tender
Table of Multiples of Notes and Payments of Application Amount under non-competitive tender
Tender of Exchange Fund Bills and Notes
Tender Results of Exchange Fund Bills and Notes
Tentative Issuance Schedule for Exchange Fund Bills and Notes
Appointments and Departures
HKMA Pay Review
HKMA Publications
The Hong Kong Mortgage Corporation
Hong Kong Note Printing Limited
Hong Kong Institute for Monetary Research
Exchange Fund Investment Limited
Hong Kong Financial Infrastructure
International Relations
Investment Products Related to Lehman Brothers
Monetary Policy
Notes and Coins
Renminbi business
Credit Card Lending Survey
Monetary Statistics
Residential Mortgage Survey
Year 2000
Guidelines and Circulars


Smart tips on using autopay services


It was recently reported in the media that after the closure of an outlet of a fitness centre, consumers were very concerned about paying membership fees with credit cards.  “Smart Ambassador” at the Hong Kong Monetary Authority (HKMA), interviewed Ms Carmen Chu, Executive Director (Banking Conduct) of the HKMA on this issue.

C: Carmen

S: Smart Ambassador


Carmen, I know that one of your duties at the HKMA is to enhance the protection of financial consumers.  In relation to the recent closure of an outlet of a fitness centre, some news reports said that when some members of the fitness centre tried to cancel their credit card autopay arrangement for payment of membership fees, their requests were rejected by the banks concerned.  The bank staff said that only the merchant could cancel the autopay arrangement.  Why is the right to cancel such arrangement in the hands of the merchant?



I am aware of the news reports and very concerned about the situation.  The credit card autopay service you mentioned involves a credit card direct debit authorisation agreement between the consumer and the merchant.  Simply put, it is an arrangement under which the consumer authorises the merchant to deduct money from his or her credit card account directly, and therefore the merchant has the right to decide whether to cancel the autopay arrangement or not.


S:  If a consumer wishes to terminate the autopay arrangement, what should he or she do?
C: The consumer can send a written instruction to the merchant to cancel the autopay authorisation.  If the merchant ignores the consumer’s instruction and continues to charge to his or her credit card account, the consumer can provide a copy of the cancellation instruction to the card issuing bank and ask it to help contact the merchant to seek reimbursement of the disputed amount and cancellation of the autopay arrangement.  However, the consumer should note that while the bank concerned will try its best to provide assistance, the outcome depends on whether the merchant is willing to cooperate.


S:  What should the customer do if the autopay is not arranged through a credit card but a bank deposit account?

C: He or she can directly ask the bank concerned to cancel the autopay authorisation.

S: Both being autopay arrangements, why are the cancellation methods for autopay by credit card and by bank account different?

C: It should be noted that autopay arranged through credit card involves the consumer authorising the merchant concerned to charge to his or her credit card account, while autopay arranged through a bank account in general involves authorisation given by the consumer to the bank concerned to transfer money to a designated account.

S: I see.  Precisely because the parties being authorised are different, the cancellation methods differ.

C: Right.  I would also like to take this opportunity to remind consumers that provision of an “authorisation” is something that should be handled with care and prudence.  Before signing any authorisation documents, consumers should first clarify who is/are being authorised, whether they are reliable and how to cancel the authorisation. It is worth noting that even if the consumer has cancelled the autopay authorisation to the merchant, this does not mean cancellation of the service contract or membership-related agreement that the consumer has entered into with the merchant.

S: Apart from autopay arrangement, many consumers opt for prepaying service fees by means of instalment payment plans using credit cards, for example, at fitness centres and beauty parlours.  If the merchant goes out of business before the consumer can enjoy all the services he or she has prepaid for, does it mean that the consumer no longer needs to pay the remaining monthly instalments to the card issuing bank?

C:  In general, under a credit card instalment payment plan, the bank concerned will pay the merchant in full for the prepaid amount and then charge the customer by instalments.  In other words, the customer has obtained a loan from the bank.  Therefore, even if the merchant concerned has closed down, the customer still has to make monthly loan repayments to the bank.  In 2010, the consecutive closures of several yoga centres aroused concerns among consumers about instalment payment plans involving pre-payment for services.  The HKMA issued a circular to banks in the same year to increase transparency of credit card instalment payment plans and enhance consumer protection.

S: I have heard that there is chargeback mechanism for credit cards.  Can the customer apply for chargeback if the merchant concerned has closed down?

C: Sure.  Generally speaking, customers using credit cards to make lump-sum payments upfront are eligible to apply for a refund of their payments, or a “chargeback”, in accordance with the credit card association’s rules, for services that they are not able to enjoy because the merchant has gone out of business.  Details of the chargeback protection of credit cards can be obtained from the relevant card issuing banks.

S:  How can we become a smart credit card user?

C: The key is to read the relevant terms carefully and understand your rights before using the credit card.  Whenever you are unclear about the terms and conditions, you should first enquire the card issuing bank. I also suggest consumers to browse the HKMA webpage on Consumer Education Programme - Credit Cards, or download the Smart Tips for reference.



Cancellation of Direct Debit Authorisation (DDA) Instructions 


payment method 

Authorised party 

Method of cancelling DDA instructions

Bank account


Present the request directly to the bank concerned for cancelling the DDA

Credit card (non-instalment payment plan)


Issue a written instruction to the merchant concerned for the cancellation of the DDA - Should the instruction be ignored by the merchant resulting in any transfers still being effected, you can provide a copy of the cancellation instruction to the card issuing bank, requesting it to help contact the merchant to seek reimbursement of the disputed amount and / or cancellation of the DDA.  However, the outcome depends on whether the merchant is willing to co-operate.


Credit Card Chargeback Mechanism 

Payment method

Is it a loan?

In case the merchant goes out of business before delivery of the services contracted for, are customers eligible to apply for a refund of their payments for services that they are not able to enjoy?

Lump sum payment through a credit card


Generally yes, but chargeback applications are subject to relevant chargeback rules and procedures.

Instalment payment plan through a credit card

Most likely it is a loan agreement but this depends on terms and conditions of the instalment payment plans of different banks.

Most likely it is a loan agreement, so even if the merchant has closed down, the cardholder still has the obligation to repay the monthly instalments to the bank. However, some banks offer chargeback mechanism for instalment payment plans. Cardholders should check with the respective card issuing banks.



Written by Smart Ambassador
Smart Ambassador, a staff at the HKMA, is inquisitive and will share with you from time to time the tips on using banking and financial services in a smart and responsible manner.

7 July 2016

Last revision date: 7 July 2016
Tender Invitations
Legislative Council Issues
The HKMA Information Centre
Monetary Stability
Banking Stability
International Financial Centre
Exchange Fund
Annual Report
Half-Yearly Monetary & Financial Stability Report
Quarterly Bulletin
HKMA Background Briefs
Reference Materials
CMU Bond Price Bulletin
Economic & Financial Data for Hong Kong
Monthly Statistical Bulletin
Monetary Statistics
Press Releases
Guidelines & Circulars
Forthcoming Events
Information in Other Languages (Bahasa Indonesia, हिन्दी, नेपाली, ਪੰਜਾਬੀ, Tagalog, ไทย, اردو)
Account Opening
Consumer Corner
Consumer Education Programme
Complaints about Banks
Complaints about SVF Licensees
Internet Banking
Fraudulent Bank Websites, Phishing E-mails and Similar Scams
Be Careful of Bogus Phone Calls and SMS Messages
Authenticate the Callers and Bank Hotline Numbers
Register of AIs & LROs
Register of Securities Staff of AIs
Register of SVF Licensees
Investment Products Related to Lehman Brothers
Photo Gallery