Persistent Credit Card Charges: A Phenomenon Banks Continue to Grapple With
In Australia, consumers often find themselves in a predicament when trying to stop recurring credit card charges. A recent case involving longtime CHOICE member Andrea Osborne highlights this issue.
Andrea, who had trouble cancelling her TotalAV subscription, despite multiple attempts, found herself facing unexpected charges on her credit card. TotalAV renewed her subscription and upgraded her security without her knowledge or consent, initially charging her a modest $20, then $40, $102, and later $184. Despite the issues, TotalAV offered more and more discounts when Andrea tried to cancel the subscription.
Visa automatically updated TotalAV with Andrea's new credit card details, a standard procedure by the credit card giant for participating businesses. However, even after closing her account with ANZ Bank, TotalAV managed to charge her twice on her new card.
ANZ, like many banks, has a disputes team to assess eligibility for a chargeback in case customers are unable to resolve the issue with the merchant. The bank advised Andrea to contact TotalAV to stop recurring charges, but the process was fraught with obstacles. TotalAV's customer service presented a verification process that made it difficult for Andrea to cancel the subscription.
Banks are required to cancel ongoing direct debits at the customer's request, but recurring charges to credit cards are not covered under the same rule. This means that consumers, like Andrea, have to contact the merchant directly to cancel the subscription or payment arrangement.
The Commonwealth Bank provides guidance on its website for stopping recurring payments on credit cards. However, even with this information, consumers may face a frustrating process involving repeated interactions with both the bank and merchant, sometimes with limited success. Banks often say the consumer must deal directly with the merchant for recurring credit card charges.
This was the case for Ross Pollock and his wife Peggy, who faced trouble stopping recurring credit card payments from Microsoft and Avast despite closing an account and having power of attorney. Ross believes that the bank should not continue to honor payments to third-party suppliers after the account holder has requested that they be stopped.
In conclusion, consumers should always attempt to cancel recurring credit card charges directly with the merchant, keep records of these communications, and then escalate to the bank if the charges continue. Banks have stronger duties regarding direct debits but have limited power to unilaterally stop recurring credit card charges without merchant involvement.
[1] Banking Code of Practice: https://www.bankingcode.org.au/ [4] ANZ Guidance on Recurring Payments: https://www.anz.com/personal/everyday-banking/manage-your-account/managing-direct-debits/recurring-payments/ [4] Commonwealth Bank Guidance on Stopping Recurring Payments: https://www.commbank.com.au/personal/everyday-banking/manage-your-account/managing-direct-debits/recurring-payments/stop-recurring-payments.html
In this situation, consumers like Andrea and Ross find themselves facing a significant challenge in managing their finances, as the process of cancelling recurring credit card charges is often a difficult business choice. Despite multiple attempts, they may encounter obstacles with both the merchant and banks, necessitating prolonged engagement and potential frustration.
