The following article headed
"Would you credit it?
A number of you were shocked to learn of the reader who was billed for credit card transactions two years after closing his credit card account. "
at the Guardian web site
www.guardian.co.uk/online/story/0,3605,624963,00.h...l
shows why it is risky to authorise companies to deduct regular payments from your credit card account. Note that the RAC and AA both have this method of payment as one of their favoured options.
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I had a similar problem with the AA but with direct debit.
First they charged me for my parents breakdown cover and even after sorting this error out they did it again the following year even though i had cancelled my policy.
NOT impressed ,.... now with the RAC.
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Apart from anything else, I prefer to to have the opportunity to decide if I really want to continue, so I don't go in for DDs.
Of course this is why all these firms love continuous mandates so much. Its the old inertia selling game.
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having just had to take out RAC membership (last years was free with the car) I found that they lump extra money on the cost if you don't go with the continuous option, it was as much as £30 quid extra. I wonder how they would react if I phoned up now and cancelled next years renewal in advance?
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It all comes down to the competence of the trader, nothing to do with the method of payment.
At work here we charge subscriptions to 17,500 people per annum by direct debit.
I can honestly say that we have never to my knowledge charged incorrectly, i.e. unjustifiably or an incorrect amount.
The only trouble we have is with members who wish to resign but do not tell us in advance. In that case we make an immediate refund.
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There is a major difference between credit cards and normal bank accounts.
I have this on very good authority, SWMBO works for a major High Street bank on credit card debt recovery so I hope she's right!!
Basically a Direct Debit on a normal bank account in administered by the bank and can be cancelled by the account holder at anytime in writing and the payments will then be stopped by the bank. You don't have to inform the retailer but it is deemed to be good manners and prudent to do so.
However on a credit card there is actually no such thing as a Direct Debit, however it may be dressed up. The equivalent is a Continuous Authority and, IMHO, is a pretty nasty little animal. Basically this is an open ended agreement between the card holder and the retailer allowing the retailer to debit regular amounts against your account, and, as I understand, virtually what they want when they want.
The sting is in the tail, if you cease your business with the retailer you cannot stop the authority only the retailer can, even the credit card company cannot refuse the debit on your behalf as they are legally bound to honour what is still a valid contract between cardholder and retailer.
SWMBO looked very deeply into this as a relative was having trouble with an ISP who wouldn't stop billing his credit card and she couldn't see an easy practical way out, relative resorted to solicitors' letters and suchlike in the end. She tells me that she has come across similar instances quite regularly when trying to help some of her customers.
SO BE AWARE!!!!!
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Cockle,
Not to argue with an expert, but are you confused between Direct Debit and Standing Order ?
I thought what you said was true for Standing Order, but Direct Debit also had to be cancelled with the Retailer ?
Asking for confirmation, not arguing.
Mark.
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Mark (Brazil)
Certainly worth the clarification, money's a serious business (especially when I'd rather it was buying me a pint).
I've lifted the following quote from the Direct Debit website:-
www.directdebit.co.uk/
'A customer can cancel a Direct Debit any time by advising his/her Bank or Building Society in writing, although it is advisable to also inform the company requesting payment.'
Personally I agree with you and always take the belt and braces approach and tell everyone I think who needs to know.
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continuous payment by credit card is a different legal agreement to direct debit or standing order
DD and SO can be cancelled by only talking to bank (although it is good manners to tell the party that normally gets paid)
as said continuous payment by credit card is different
AA are p**s poor at managing this, and you DO have much more control if the money is comming out of your current account by DD or SO
Ditched AA anyway for their pro-speed camera position on the news one night
RE Internet Service Providers, AOL are renowned for continuing to take money from peoples credit card accoutns long after the agreement has been cancelled, they has often been comment in PC press, best way to avoid this is to use Amex not Visa or Mastercard - As Amex have a much more Pro-Active customer help approach than most other CC companies in this regard
Other Service providers are not so bad
Wouldnt use AOL anyway as their software tends to screw other stuff up, and its generally regarded as the beginners way of accessing the internet
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