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In my answer to a recent question, I pointed out that some auto renewal programs are scams.

it is a scam, they never intend to let you cancel your free subscription easily.

The company just has no reason to stop taking your money. So they keep charging your card.

Is it possible to have your credit card company stop allowing charges from the company, or is canceling the credit card your only option?

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Easily. Just do a chargeback.

This applies to credit cards. If you're using debit cards, you're on your own.

First, make a modest effort to work directly with the vendor. The onus is on the vendor to be reasonably accessible: have an online site that actually provides a way to cancel that works; provide a customer service number that works, etc. Spend 10 minutes on this earnestly, and you have fulfilled this duty.

Then, contact your credit card company and report fraud and request a chargeback. Tell them about the reasonable efforts you made to contact the company, and that it's an auto renewal you don't want. You will get your chargeback. Others who are saying otherwise are just wrong.

The merchant has a tough time arguing

Mind you, there's some variation here, depending on what the goods are.

For any online service that is prepaid by the month or other period, like Major League Baseball live streaming (annually), Netflix (monthly) etc., it is impossible for the merchant to dispute the chargeback. The Bank's logic is very simple: the merchant is able to instantly disconnect your service. And the bank says "Look. If the customer doesn't want your service, stop selling it to them and walk away. If you want to snare the customer in lawyerly contract tricks, we won't help because that's bad business, we don't like to see that from businesses with a welcoming Mastercard sign on their door."

Virtual goods generally have so much merchant-side scamming that banks have little patience with it. If you buy Warcraft gold, and charge it back, Blizzard is expected to give you back your cash and use their god-power in-game to clawback the gold. A third party goldseller is just outta luck.

Now suppose it was a monthly stamp subscription. Every month they auto-sell you a roll of 100 stamps for $49. Stamps are fungible, easily converted to cash. And the good is physical and they have already shipped it. In this case, the merchant is likely to succeed in a chargeback. But not on the second chargeback a month later; the merchant should have known from the first chargeback that the customer doesn't want the good.

Casino chips are a more extreme example of "fungible to cash". A lesser example is event tickets; there's a tangible physical ticket and a vast underground economy for people to trade those tickets. Charging back tickets you have already printed out may meet resistance, especially if the event is over and the merchant can show the tickets were used. But again, banks expect merchants to "take a hint" and stop autocharging when the customer complains.

Chargeback only cancels the payment method

A chargeback only cancels the payment method, not the debt. So the merchant is at liberty to march down to the courthouse and use that reason (or any reason, as trumped up as they please) to sue you and try to collect that.

But the legal system isn't any more tolerant of bullpuckey than the banks. Much less in fact. The merchant is very likely to be handed their hat. And sanctions too, so at the least they should expect to pay defendant's legal fees, and at worst be barred from suing again without court oversight! The latter would apply if they tried to do this on a larger scale, e.g. Suing hundreds of cancellers. Righthaven, Prenda, etc.

Since a lawsuit is a lost cause, they'd be far more likely to just bill you a lot and threaten to take it to collection agencies. In fact, WIRED Magazine did that.

Of course, if the charges are part of a genuine, enforceable agreement or debt, this principle means you are still on the hook. I can't think of many examples of things typically paid for by credit card like this. But, say, if your landlord gives you the option to pay your rent by credit card, chargeback doesn't extinguish the need to pay rent, it just means you can't use a credit card anymore. Another example is a doctor's bill. Or your electric bill that you autpay via CC. Another, bless the few of you likely to commit to one of these, is an enforceable pledge to a charity.

But all these are plain debts that just happen to have an option by which they can be paid by credit card. Obviously you owe them.

Chargebacks equal consequences

What they won't be doing is re-charging your credit card for the amount you already disputed with additional fees. You'll simply dispute that, and the bank will read them the Riot Act, and this very negative attention in the fraud department will endanger their ability to remain a Visa/MC merchant.

Because yes. Merchants with excessive numbers of chargebacks face consequences, including withholding of substantial fractions of their money, higher transactional rates, and cancellation of their merchant services altogether.

A new merchant who is getting a lot of chargebacks could see ALL of his money frozen and held back to cover all the chargebacks the bank expects to have to give, which could be 100% if the product is fraudulent.

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    This seems like the best and most correct answer. Do you have any supporting references? – James Jenkins Sep 24 '18 at 12:17
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    @JamesJenkins i have a busy day but will hunt some down when I can. – Harper Sep 24 '18 at 14:27
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You can, but it won't help.

You can easily cancel any charges on your credit card, but this only puts the obligation to prove that you really owe the payment onto the charging business.

If the charge was incorrect or fraud, that typically ends the discussion, because they cannot prove that you owe it.

However, if you really do owe the amount, this is going to come back and bite you badly - you will be charged again, get fees added, and potentially have to pay for the processing cost of the credit card company and the business.
Also, of course you can't just walk away from contractual obligations by closing your credit card. That just postpones the moment when they collect their money.

Never use this to try to skip legitimate charges, it's not going to work, and will hurt you only harder.
Unfortunately, when you sign up for a monthly plan, their charges are legitimate; and in the fine print they typically describe the tiring process of canceling, so you agreed to it too.

  • You may want to put more emphasis on the concluding sentence. --> "Unfortunately..." Everything up until that point comes across as saying yes you can do this. – Mr.Mindor Sep 21 '18 at 21:47
  • If you really do owe the money -- yes, if you're on a payment plan, you have to keep paying until you hit zero balance. A subscription is different. Your balance is zero, you owe nothing. – Ben Voigt Sep 22 '18 at 2:28
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    They can't just repeatedly charge your credit card over and over after you raised a dispute, and they certainly can't re-charge your card for the original charge+fees after you prevailed in a chargeback. You would (and should) just chargeback that also, and when you tell that story to the bank, it'll get escalated in all sorts of ways the merchant Will Not Like. The merchant will not be doing that again! – Harper Sep 23 '18 at 22:08
  • @Harper I can very well imagine that. But, if you have it at hand, I would like to have some supporting background. Maybe just that you worked in something related, some kind of source, nothing formal. No question that in itself, it perfectly matches my expectations, and is very consistent with the interest of a card company. – Volker Siegel Sep 26 '18 at 1:05
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I've used credit cards for decades (never paid a penny in finance charges :-). While it's a finite sample, during that time I've had 10-12 charges that I have disputed - incorrect billing, phony billing, failure to stop billing me, etc.

If after chasing the claimant I got no resolution, I called the CC company to dispute the charges. Since my claims were legitimate, in every instance the issue was resolved in my favor by the CC company. I've never had to cancel a card. AFAIC, that isn't a solution since by doing so, you would then be considered delinquent.

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    I have the opposite experience. My father signed up for one of these free trials and was unable to contact the seller to cancel despite repeated efforts. The credit card company refused to stop payments. Their stated reason was that the (unwanted) product had been received and their policy was to resolve the dispute between the vendor and the customer first. Inability to contact the vendor was not good enough for them. After six months of this (nearly a year of charges since he didn't contract the cc company immediately) I got him to cancel the card and that was the last we heard of it. – Eric Nolan Sep 21 '18 at 12:41
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    The experience may vary depending on the credit card company. I'd hope mine, which is operated by my bank, would be more amenable (based on the implicit threat that I'd take all my business elsewhere) than my father's (unsolicited you have been pre-approved letter) provider. – Eric Nolan Sep 21 '18 at 12:43
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    Maybe I've just been lucky :->). I recently subscribed to a financial data service that I only wanted to use and pay for one month. The day before 2nd month renewal, I attempted to cancel. Though I signed up at the web site with my credit card, I was directed to cancel through Paypal which I hadn't used for the sign up. The automated system at the Paypal number provided ran me in circles. I called several times. Utter frustration from time wasted. Finally, I disputed the charges via my CC and it was resolved immediately. Perhaps it may boil down to the integrity of the vendor? – Bob Baerker Sep 21 '18 at 12:52
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    @EricNolan I'd have dropped them like a hot potato for a response like that. I got a totally bogus charge on my card, the listed contact number was just a recording saying to contact them online. That was enough for the credit card company, they cancelled the charge. (Note that it was a small amount, it's possible they just ate it rather than charge it back.) – Loren Pechtel Sep 22 '18 at 2:17
  • @LorenPechtel: Fraud is a lot easier to dispute than unauthorized charges from a merchant that you have an actual history with. – Ben Voigt Sep 22 '18 at 2:27

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