After a lot of hassle with a Capital One account, I paid off the balance and wrote to Capital One to cancel - the letter was sent by Recorded Delivery and was received by them. A week after Capitla One had received the cancellation letter a payment was taken off my account for a magazine subscription which I hadn't managed to cancel in time. Is this right - should payments still be capable of coming off an account which has been closed?
Alan
Don't reply to this e-mail address - messages will be deleted unread. To reply to me take away the news and substitute alanc
You cant 'stop' continuous payment authorities with the card provider, only with the creditor. In theory you can never close a credit card account because an irrevocable payment might still turn up. Its the same as 'closing' a bank account when there are still cheques in circulation which were issued in conjunction with a cheque guarantee card.
If the account balance is zero you can cancel over the phone, just did that last week. Of course you need to make sure no new payments are made on the card, as soon as the balance goes up they can't close the account.
Graham
To reply to me take away the news and substitute alanc
Surely the two situations are quite different. In the case of a guaranteed cheque, the bank has made a commitment to pay the cheque, so it should be honoured. In the case of a credit card transaction, no commitment to pay exists unless the card company has given authorisation for the transaction. If it has, then what on earth are they doing giving authorisation for a transaction on an account which they know has been closed?
Unfortunately this is the case - it is whats known as a "continuous authority" payment. So they are within their rights to take it, and Capital One are right to accept the payment.
Best to write a cheque for that amount and send it to Capital One, and ask them to check no such other nasty surprises are lurking!
Not so. Whilst many transactions are pre-authorised on-line many are not. The on-line checking is just a security back up and to make the processing easier. The merchant accepts the credit card because he knows it will be paid
It doesn't have to.
If they are asked to pre-authorise then you are right, but they often aren't.
Guaranteed cheques are a smokescreen in this argument. If you write an unguaranteed cheque, you are still liable to honour it.
Errm, the card company does not have the power to give authorisation. All authorisation derives directly from the card holder. It can be withdrawn at any time. It's just that with a direct debit the customer notifies the bank of withdrawal of authority, and the bank will then no longer honour payee payment requests. It would of course be only courteous of the account holder to inform the payee as well.
With a CCA, you have to inform the payee. But having done so, if you also inform the card company that you have withdrawn the authority from that particular potential payee, enclosing evidence that you have done so (e.g. copy of letter), then they should no longer accept charges based on that authority. In practice they can't be expected to keep track of such, because they don't normally, I think, have a record of the CCA. The CCA lives with the payee to be produced on demand in the event that a payment is queried.
The rule for all card transactions is fundamentally the same. You can query any payment, and if it was made without your authority, it will be refunded. If a CCA is produced as evidence of that authority, then that evidence will be anulled by evidence of its withdrawal.
He accepts that risk for one-off transactions if he doesn't bother to obtain "authorisation" (which is really the wrong word, "validation" might be better). But for repeat transactions, the risk of the customer being bogus is diminished. In any case, if the card company did not offer some level of guarantee that the merchant will be allright, then cards would be very much less widely accepted than in fact they are.
The authorisation comes from the customer signing the chit. A payment can only be bounced in cases of fraud. If it really was the card holder (and not someone pretending to be the card holder and who forged the signature), then the merchant *will* be paid. If the card holder has gone over limit, and payment is refused on that basis, the merchant can still chase the card holder for payment (and can probably require the card company to assist in tracking him down).
Yes he does, unless the drawer is bankrupt. Again, it's just a little more difficult than with a guaranteed cheque, because then it's the bank, not the merchant, who will chase the drawer.
When I sign a credit card slip, how do I know whether it is a single transaction or a continuous authority? I don't recall any obvious wording either way. And for a 'cardholder not present' transaction there seems to be no way of telling.
A normal card slip for an in store purchase would normally be a "one-off". They would have to make it clear to you if it's a continuous authority, and these can normally only be cancelled "in writing" once set up (as far as i know). No doubt there is a URL that gives regualtions regarding the setting up and cancellation of continuous authority somewhere.
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