Merchant Dispute

A customer purchased an online software. She claims that she tried to contact the company to cancel the subscription. In our investigation we discovered that there were certain contractual steps she was required to complete in order to cancel the subscription. She did not meet those obligations. Therefore the cancellation did not process. She has now met those requirements and it has been cancelled. However, she is now asking us to reimburse her for the last year since she did try to cancel.
I want to make sure I am not missing anything under VISA rules...we are not obligated to reimburse her since she did not fulfill her contractual obligations to cancel, right?

Thanks so much.

1. Zero Liability does not apply since the transactions are not the result of a lost/stolen/compromised debit card.
2. Reg E does not apply since the transactions were authorized and the correct amount was debited.
3. Since you have determined that the cardholder failed to comply with the terms of their contract, you do not have chargeback rights for "cancelled recurring."

As you surmise, this issue is between the customer and the merchant. You have no obligation to get involved or provide credit under Reg E or VISA rules.

Thank you so much.

Out of curiosity, when did she notify you that she wanted the transactions stopped? Was her account debited for transactions after she gave you notice?

There is an obligation under Reg E to permanently stop pre-authorized recurring electronic debits when a consumer gives timely notice.

These transactions occurred in July. We were notified last week. The customer has now deactivated her card.