|Gary Foreman is a former Certified Financial Planner (CFP) who currently writes
about family finances and edits
The Dollar Stretcher website
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I requested that my credit card account be
closed in June. In November I received a bill for $110 for automated charges
that go through once a year. The credit card company said that it was my
responsibility to request that these charges stop going through.
The problem is
that I can't get through to these companies to have these charges stopped. I had
actually requested that one of these companies stop charging my card and they
did not. This is a big part of the reason that I requested to cancel the card.
Is it legal for the credit card company to continue allowing charges to be made
to my account months after I request the account to be closed? If I can't ever
get through to these companies because they are always having technical
difficulties, am I just doomed to have the credit card account forever? Who can
I ask for help?
Kristen has discovered that there's a flip side
to the convenience that's offered by automatic bill payments. Sometimes it can
be difficult to stop those same automatic payments. Let's take a look at
automatic bill paying and see if we can't find a solution to Kristen's problem.
It's easy to see why automatic bill paying is
popular. For the consumer it is very convenient. No need to write and mail
checks each month. As long as you have enough money in the account there's no
chance of triggering a late fee. The Electronic Payments Association estimated
that consumers saved $4.5 billion in 2002 by using direct payments.
The companies whose bills are being paid
automatically love it, too. They spend less when they don't have to sort, post
and process checks. They're more likely to be paid on time. And, the consumer is
more likely to continue paying for the service even if he doesn't use it. No
check writing to remind him he's wasting money.
According to the Automated Clearing House Network
in the 3rd quarter of 2005 there were 2.7 billion automated transactions worth
more than $6.1 trillion.
It's a great system. Except when it goes wrong.
And sometimes it seems as if the selling company wants it to go wrong. Because
the longer they can pretend not to know that the customer wants the service
stopped, the longer they can charge for it. Some companies are notorious for
making it difficult to cancel automatically billed products and services. As in
Kristen's case, sometimes their phones always seem busy.
She has already discovered that the credit card
company will not be responsible for notifying companies that she wants a
service/billing stopped. In fact, she can pretty much expect that they will
process any bills that are legally presented to them.
But that doesn't mean that Kristen is doomed to
pay for these services forever. The Fair Credit Billing Act provides some
Kristen needs to notify the billing companies in
writing that she wants the service/billing to be stopped. She should send the
letter via 'certified mail, return receipt requested' so that she has proof that
it was received. Check the statement from the company for a heading like "in
case of error" or "send inquiries to".
If a statement is not available, Kristen can do a
web search for the company. Once on their site she should find a 'contact us'
page that will have their mailing address. Be sure to include sufficient
information in the letter: account number, how much is being charged, how often
and for what goods or services. State clearly that you want it stopped
At the same time, Kristen should also send a
second letter to the credit card company. It, too, should be sent with return
receipt. State that you have contacted the billing company in writing and
ordered them to stop billing your credit card. Include the company name, the
amount being charged and the product/service that has been cancelled. Kristen
should keep her copy of both letters and the return receipts when they come back
That should take care of the problem. But,
sometimes things don't go according to plan. The next step would be to contact
the Attorney General's office in her state. She can find a listing at <www.creditinfocenter.com/repair/stateag.shtml>.
Kristen will want to write them a letter explaining what she has done. Include
copies of the earlier letters to the billing and credit card companies.
The Federal Trade Commission (FTC) is the final
recourse. For information on consumer issues call 1-877-FTC-HELP or go to
www.ftc.gov and fill out the complaint form.
As to closing the credit card account. Kristen
should be able to do that at any time. That, too, should be done via return
receipt mail. And Kristen needs to recognize that even if she closes the account
to new charges, she's still responsible for paying any balance on the account.