Terminating Automatic Bills
The Dollar Stretcher
by Gary Foreman

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?
Larry

Larry 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 Larry'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 Larry'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 Larry is doomed to pay for these services forever. The Fair Credit Billing Act provides some protection.

Larry 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, Larry 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 immediately.

At the same time, Larry 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. Larry should keep her copy of both letters and the return receipts when they come back to her.

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. Larry 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. Larry should be able to do that at any time. That, too, should be done via return receipt mail. And Larry needs to recognize that even if she closes the account to new charges, she's still responsible for paying any balance on the account.