September 09, 2004

• I would contact your CC company and challenge the charge. Not sure about the legality.
• Did they change it to the new, correct expiration date, or did they just make one up? If they don't have the correct expiration date, the credit card company should have flagged it. Like Suomynona said, contact your credit card company and challenge it.
• Thanks to both of you... not concerned about what action I should take, I'm clear on that. What I'm specifically looking for is whether this is a common practice, an ethical one and whether it's even legal. I mean, it's not information that I provided to them. So, yes, they entered a different year and it was the correct one that matched the new expiration date.
• just out of curiosity, is it an ongoing order? something you have automatically charged every month?
• When you originally signed up for whatever service that's now billing you, did you agree that they could continue to bill you until you specifically cancel the service? If that's part of the terms of agreement, they may have a right to call the credit card company and get your updated information in order to properly bill you. IANAL, nor do I have any experience in this field, but I'd guess that they would need some sort of justification for doing something like this. (On the other hand, credit card companies are shady by nature, so I wouldn't put it past them.)
• "Guessing" at the new expiration date is not in the best practices of any merchant who accepts credit cards. I've dug through the merchant pages for the major card companies and Discover card had the strongest warning for merchants, under Helpful Hints: All declines are final. Do not force through any sales for which you have received any declined response to your authorization request.
• I'm not exactly clear on the situation. Was the card charged against your wishes? Or are you just curious? If it was against your wishes, call the company and complain holy hell. If that doesn't do any good, call the credit card company and they will take the charge off if you tell them what the company did and they wouldn't cooperate with you.
• It was on ongoing service. The CC companies cannot/will not give out my information, including any information on my expiration date. I'm interested in more of what Mickey is getting at... Merchant Account issues or legalities. jccalhoun, thanks, but I'm clear on what my options are. I am looking for ethical and legal interests and issues. I'm good with my specific options.
• I deal with this from the standpoint of the vendor on a regular basis. I've chosen to contact the customer for their new expiration date, not for any legal issue but because we pride ourselves on our customer service and it gives us an excuse to talk to them about the product and get feedback on our service. It's a major hassle every single time, and I sympathize with vendors who just "update" expiration dates rather than spend endless hours trying to track people down. My understanding of the law is intuitive, so take the following with a grain of salt. I believe there are two obligations here. The customer has an obligation to continue their service or officially cancel it, they took that obligation on when they signed up. Regardless of whether or not the vendor is able to charge you for it on the card you gave them you have a legal obligation to pay and vendors will sometimes send out bills to those whose cards don't go through. The vendor has an obligation to adhere to the rules the credit card companies lay down for how the cards they issue will be used. Unfortunately, the credit card companies (to my knowledge) have not given explicit instructions on what a vendor is required to do here. Taking the Discover card policy as an example, what if I notice the card has expired and don't charge it until I've changed the expiration? It's a gray area, but I'm pretty sure the credit card issuer if they addressed this specifically would want the vendor to call for the new expiration date. Long story short, I think they have an ethical obligation but the legality is iffy.
• I actually had a similar situation with my own card recently. I just happen to work at a USian financial institution that issues Visa debit and credit cards, so I tapped the brains of my fellow cube-dwellers for some info. I have a monthly recurring charge for a newspaper subscription. When my old card expired, the charge continued to go through as normal, even though I never gave them my new expiration date. I took a look at the info the merchant presented when requesting the authorization. Apparently, they did indeed just "guess" a new date a couple of years ahead. Since the charge is classified as a "recurring transaction", Visa doesn't verify the expiration date when it's presented for processing as long as it's not past that date. Then, when it's passed on to us (the issuer) for approval, we don't even look at the expiration date, we just verify that funds or credit is available. I would have to assume that the big credit card companies deliberately made this a fuzzy area in order to allow merchants to seamlessly bill for/provide services in the event of a scheduled reissue. I'm sure a cardholder could successfully dispute a charge that came through like this, but that's got to be fairly rare when you're dealing with recurring charges.
• I am a small business owner who runs hundreds of mail order transactions per month on a Linkpoint terminal. Occasionally we get new orders where someone apparently used an older card # and expiration, probably without thinking. I've always advanced the expiration date a year or two before processing and it clears fine. I've only done this a few times out of thousands of transactions, but the customer gets his stuff without a delay and everyone is happy. I always take it as a simple oversight. But if someone is -intentionally- giving me old data thinking that I'm going to ship without the ability to receive payment, then that's fraud. As far as subscriptions go, that is a whole different story. While I think that some contracts may allow this to continue the service, I would never do this myself... it's too much of a gray area.
• My experience has been the opposite. When I first signed up for a subscription for internet access, it didn't occur to me to update information with the ISP when I got a new card with new date. Imagine my dismay when the notified me that they were turning off my account since my credit card company was refusing to clear the charges. Light eventually dawned, and I updated my account information, but it would have been nice if they had sent an email saying "Hey, stupid, your card expires in a month a month, so why not let us know what you want to do."
• Having some customer service experience, I can see this situation as a Catch-22 for the business involved. It would certainly be most correct for the business to contact the customer and obtain the new expiration date, or at least notify the customer. However, it can also be quite difficult to get hold of a customer for anything that isn't so critically important that they aren't already calling you. Notifications are very easily overlooked, lost, or ignored. And if a service is discontinued because the customer failed to reply and update their cc expiration, I can tell you from personal experience that many customers are going to blame the business involved.
• Thanks to all for your input. As someone who has worked in the recurring charge industry of ISPs and web hosting companies I was a bit shocked. I've had customers tell me that they weren't going to bother cancelling their accounts because the credit card our company had on file was outdated anyway. It had never even entered my mind that a company would do this. Anyway, thanks again.
• I used to work in the "Disputes" department of a CC company, but it's been a while. To the best of my memory, when you make a purchase for a service like, (one of the more common examples I dealt with) a porn site, you're signing up for a recurring monthly transaction that has specific conditions you need to meet in order to cancel. Typically, it's something like "you must give 30 days written or verbal notice prior to cancelation." The charge is put through with a certain authorization code that says "This transaction is authorized to be charged every month." Not only does this mean the charge will go through if the expiration date changes, it will also go through even if you report the card lost and the number changes. The only way that we would be able to take any action against the merchant/slutty sorority girl and her webcam would be to get proof of cancelation, usually in the form of a registered letter. Otherwise, the transaction was considered a legitimate recurring monthly transaction.