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#1659551 - 02/02/12 01:37 PM Debit card dispute - recurring charges
AuditorK Offline
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Joined: Feb 2003
Posts: 961
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I'd like someone to tell me if this is really the case...

We have a customer that signed up for automatic delivery of vitamins, whereby his debit card is charged monthly for each shipment. After a few months, he called the company to cancel the service and told them to stop the deliveries and charges to his debit card.

The charges have not stopped (2 month later) so now he files a Reg E dispute with the bank. We close his debit card and refund his charges, but the charges keep coming in on his closed debit card and are being posted to his account anyway. I'm being told there is no way we can stop this and the customer is out of luck.

Doesn't sound right to me. How else does he free himself from these charges - close his account and go to another bank?

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#1659586 - 02/02/12 02:00 PM Re: Debit card dispute - recurring charges AuditorK
AFaquir Offline
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AFaquir
Joined: Jan 2011
Posts: 763
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Who told you that the customer is out of luck?

Closing the card... should have stopped the charges. If it didn't and your bank agreed that the postings were in error, and disputed as such by the customer... you should be refunding every penny that comes out from this activity... Consider if the card was lost or stolen, would you all allow the card reported stolen to be used? No way!

However, I do know that from time to time some issuers like AMEX on the credit side will allow recurring charges to post to a closed card (provided your account is still open, like when you report a card lost or stolen)... so long as those charges weren't being dispupted. So I use my AMEX to pay my ADT security bill on a recurring basis... I called my card in lost or stolen, and they closed the old card number... in doing so they allowed those recurring charges for 90 days before stopping them to allow me time to notify ADT of the account number change... but I agreed to that, they asked if I wanted to have that happen.

Cheers!
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#1659697 - 02/02/12 03:38 PM Re: Debit card dispute - recurring charges AFaquir
AuditorK Offline
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Joined: Feb 2003
Posts: 961
PA
I think where the disconnet with our folks comes from the bank's ability to chargeback with M/C and get reimbursed on these continuous charges by the merchant after the card is closed. I know M/C's chargeback rights for banks is totally seperate from Reg E's error resolution rights for consumers.

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#1659921 - 02/02/12 06:17 PM Re: Debit card dispute - recurring charges AuditorK
John Burnett Offline
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John Burnett
Joined: Oct 2000
Posts: 39,336
Cape Cod
One missing link in our discussion is whether you placed a block on future transactions with MasterCard or Visa. Because of the provision for ongoing stop orders under Reg E 1005.10 (Commentary), the card associations had to come up with the ability to block transactions before they get to your bank, since some transactions don't require that authorization messages be sent.
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