How can a company charge a closed credit card?

Question

My Visa card was closed due to the company of this particular Visa card going out of business. I couldn't charge my card and could only make payments. However, Emusic.com was able to charge it, despite my having closed my account with them. How can a company charge a closed credit card?

Answer 1

If this is a pre-authorized automatic billing, and if you have signed any contract with the merchant, cancelling may not block any future charges from the merchant.

Happens with gyms, magazines, memberships quite often. There is a time period after the cancellation this will occur, then it'll be completely dead.

Answer 2

You should contact the Company who purchased your visa balance and ask/write the following questions:

1. Dispute the charge from Emusic.com as invalid.
2. Instruct that no future charges will be accepted.
3. How come Emusic.com was allowed to debit your account?
4. When did they purchased your visa account?
5. Ask for written verification that they purchased your account from the original company? such as a bill of sale?
6. Ask if the company is a registered debt collector in your state?
7. The FAIR DEBT COLLECTION PRACTICES ACT (FDCPA) may apply to your circumstance(s) and provide for $1,000 in damages to the consumer and $1,000 attorney fees from a third party debt collector per violation.

You may want to seek the advice of an attorney to help determine if you have a good cause to sue the company and Emusic.

If you did not receive anything form Emusic.com or your contract/agreement ended without a cancellation/early termination fee, Also, file a written dispute with Emusic.com.

Check your credit report.

Many companies automatically charge your accounts through automatic payments after termination of the agreement because they get away with it in the U.S., if the consumer does not take steps to dispute the current charge and stop future charges from occurring in the future.

Never use auto pay unless required and the service is essential. When using auto pay use a dedicated account not your main checking account. It is less of a pain in the neck to close the account if its your 2nd or 3rd checking account and not your only account.

Answer 3

Wow, I had never heard of this before but I looked into it a bit and Mikey was spot on. It seems that if you don't pay attention to the fine print when making credit card purchases (as most of us tend to skip) many companies have stipulations that allow continued charges if they are recurring fees (monthly, yearly, etc.) even after you have cancelled the card.