Oh no Credit Card troubles again
November 25, 2003 10:25 AM   Subscribe

More problems with credit cards...after you canceled one Apparently some credit card company may not take you seriously when you say "I want to cancel this credit card". If the account of the credit card is not "terminated" you may still be charged, even after receiving a letter from cc company confirming you its cancellation. You may also receive "accidental charges" of stuff you never ordered. One more link inside.
posted by elpapacito (26 comments total)
 
A very brief and quick look around with google reveals in this link that the problem can be track back to at least 1998. Guess the cc companies haven't heard about that in the last 5 years ?
posted by elpapacito at 10:27 AM on November 25, 2003


one of the things that really burns me: when you cancel one of your credit cards, the credit card company in question is supposed to explicitly say so when they notify the credit-reporting agencies. in fact, voluntary cancellation of a card generally increases your credit rating. however, a lot of the time the credit card company will leave out the fact that it was you who cancelled the account -- in which case your credit rating could even be decreased.
posted by dorian at 10:35 AM on November 25, 2003


dorian, my understanding is that you have to tell them you want it to say "account terminated at customer's request" in your file. That's the way it's explained in this book anyway.
posted by dobbs at 10:47 AM on November 25, 2003


you have to tell them you want it to say "account terminated at customer's request"

thanks for mentioning about that, I should have said that bit. although the fact that it's even necessary is just one more thing that's wrong with the situation...

yes, I have cancelled 4 cards (product of a misspent college career) and each of the 4 times I have made it quite clear to the cc companies that they should explicitly mark it down as cancelled at my request. yet checking my credit report more than a year later, not a single one noted the fact that it was cancelled by my request, but that the company itself had closed the account -- in fact, 2 of them did not even say that the account had been closed at all!
posted by dorian at 11:09 AM on November 25, 2003


In the BBC article, the BarclayCard rep said, "If you were able to close your account and then go on spending, and we did not know anything about it because the account didn't exist any more, that would be a loophole for fraudsters."

My response: HOGWASH! If BarclayCard's account management system is set up so that termination of the account results in a deletion of all data related to the account, I'll eat my hat. What a bunch of baloney.
posted by tippiedog at 11:16 AM on November 25, 2003


Does anyone know why the bureaus and card issuers are not inundated with libel suits? I'm not a lawyer, but it seems to me to be a textbook case-- Evil, deep-pocketed corporations whose negligence penalizes the down-on-his luck consumer.
posted by trharlan at 11:17 AM on November 25, 2003


I recently got a new card for an account that I had cancelled over a year ago. Seems someone tried to charge something to it and the credit card company decided that was a sign that I wanted the account re-activated. The guy on the phone said this was standard policy (bastards!). I had to explicitly state that I never want the account re-opened. Seems like there are a lot of things you HAVE to say to protect yourself from the bastards, which really is a shame. Dobbs, thanks for the link that book. I am going to check it out.
posted by shoepal at 11:36 AM on November 25, 2003


One potential solutions to countless credit card issues are the so called prepaid cards. Such cards should in theory work like this:

a) you go to bank and reload your prepaid card with, for example, $1000
b) you spend $1000 somehow
c) when you have spent all of the $1000 the card doesn't work anymore, unless you go reload it at a bank again.

Such a card just was introduced in my country, it probably already exists in others, almost certainly in U.S.A.

The advantages are :
1) any fraud will at worst cost you the amount of $ you loaded into your card
2) by NOT connecting you prepaid card to your bank account (automatic reloading of prepaid card) your bank account will be more safe from prepaid-card scams that somebody will almost surely figure out

The disadvantages seem to be:
1) credit card companies are likely to charge you more for prepaid because they lose the credit business
2) they still don't get the fineprint out of equation: cc company will try to get any dime with lame excuses like "special fee for special lusers"
3) you have to drag your laaaazy assets to a bank to recharge the card

But it seems much better then exposing your credit life to hundred of scammers and parasitic companies.

On preview : books are good, internet better imho :) Quick check on the net reveals some credit card tricks list.
posted by elpapacito at 11:41 AM on November 25, 2003


Not a credit card company, but AOL did this same exact thing to my girlfriend. She canceled, didn't hear from them in 2 months, then on the 3rd month she got a bill for "discounted service." She called and complained, and their excuse was, "Yes, you canceled your original service, but we've decided to give you a discounted service to keep you with us!" Needless to say, my girlfriend swiftly told AOL to suck it. Though, she still hasn't gotten her $9.95 back.
posted by afx114 at 11:55 AM on November 25, 2003


i recently paid off an MBNA line of credit in a lump sum (thanks to St. Jude), and for the two months AFTER the balance was brought to zero, they still automatically withdrew my monthly payment amount from my bank account (i had set up auto payments months before). after three customer service people who blithely explained it was "an error" and it's "all fine now," i mentioned that i'm a lawyer and they put on a manager -- who cut me a check, still without apologizing for basically stealing my money. the problem with these globo-conglomerate financial companies is that one department has no idea what another department is doing, plus the customer service drones defer to "what's in the computer" no matter how bizarre it seems. gaaaahhhh!
posted by serafinapekkala at 12:26 PM on November 25, 2003


Credit cards suck, so does the credit rating system. When I first moved to the US I was treated like a teenager even though I had a high paying job and a long and excellent credit history in Canada. The only card I could get was Discover (who's motto seems to be "we'll extend credit to anyone!").

To build up my credit rating (more so I could eventually purchase a house than any real need for credit) I then got a store account at Sears. Sears Credit is the most fraudulent company ever. I bought something, made use of the 10 or 15% discount and tossed it in my dresser. Eventually Sears called me up and bitched and moaned at me for non-payment. After I paid off my one and only purchase I just tossed the mailers from Sears into the shredder. I didn't want to pay 150% markup for something that was crap at 50% of fair market value, so I didn't see when they tacked on extra services. They said that I signed up for some cheesy insurance policy, which I didn't. I eventually got that resolved. A while later I get another bill from Sears (I started reading them after that) and they tacked on a credit protection service. I cancelled the card after getting it resolved and having it explained to me that some companies had blanket authorization to bill to my credit card.

What The Fuck?

Sears credit needs to be locked up in a maximum security prison with a couple of syphilitic horny male porn stars.

They later decided that by cancellation that I really meant issue me a Master Card. Yeah, I'll make sure to activate that.
posted by substrate at 12:48 PM on November 25, 2003


Oh yeah, there were charges after I cancelled it (oops, an error, so sorry!) and before the MasterCard was issued.
posted by substrate at 12:54 PM on November 25, 2003


Yeah, I've had minor problems with my CC companies before but the more I learn about the whole "credit reporting" business the more it really starts to scare me. Lets face it, credit (in some form or another) is almost necessity at this point. From what I'm to understand every little detail is reported to the big three (Equifax, Experian, TransUnion) and at almost no oversight. This turns "errors" in to quite costly problems for people. I know fraud is a major problem but in order to combat it why do they have to kill the consumer.

On preview: What substrate said.
posted by Dr_Octavius at 12:57 PM on November 25, 2003


Last thought: In order to have good credit you can't pay off Credit Cards month to month, you have to carry balance. I understand that is no good for the CC company but if I'm trying for a car loan or such I should be the ideal candidate because I am low to no risk. Credit reporting should work like this not just as the bitch of card companies.
posted by Dr_Octavius at 1:06 PM on November 25, 2003


this is why I don't have a CC!
ahahahah!!
posted by cinderful at 1:23 PM on November 25, 2003


I didn't follow the credit card tricks link but something you folks might find useful is to call and say you lost your card and would like it cancelled and a new one issued. The new one will have a new number and no one will as yet have that number. This is a great way to stop recurring payments that you want killed.

For instance, I had a gym membership and the gym changed their hours (they were 24 hours before), which didn't suit me. The gym would not let me out of my year contract, and pointed to some clause stating the hours were irrelevant and they could change them. I used this method to "cancel" the membership swiftly.

This is also the way that I cancel accounts. I first call and say I lost it, even though I didn't. The CC company cancels the number (and considers any future use to be fraud). I cut up the card. The CC company issues a fresh card and since I have never ever used that number, no one could possibly have it. I then call and cancel that card and tell them to put a note that it was done at my request.
posted by dobbs at 1:25 PM on November 25, 2003


I forgot to mention that if you get in an argument with a prepayment outfit (like the Gym, above), do not mention this to your CC company as they will take the side of the vendor.

And yes, in some cases, when the vendor is getting a decline on your card, they will then pass you to a collection agency, which is a whole kettle of fish, but at least you're the one controlling if they get funds.
posted by dobbs at 1:27 PM on November 25, 2003


in fact, 2 of them did not even say that the account had been closed at all!

If they didn't say that they were closed, they probably aren't closed. Double check with your credit bureau, who will give you a number to reach the credit card company. I had to wait two years to have a credit card that I knew nothing about removed from my record. It took some patience and persistence, but my credit report is so damn important, especially at an early age, that it's almost the same as getting an inspection for a car.

One potential solutions to countless credit card issues are the so called prepaid cards.

The reason why people use credit cards is because they don't have the cash to pay for things outright, including pre-paid cards. That's why the average American is $10,000 in credit card debt.

This turns "errors" in to quite costly problems for people.

Errors are costly, but every 6 months it's in your best interest to get a copy of at least 2 of the three major reports. That's just good sense, and not incredibly expensive. In fact, in some states, they're free.

In order to have good credit you can't pay off Credit Cards month to month, you have to carry balance.

That's a myth.

something you folks might find useful is to call and say you lost your card and would like it cancelled and a new one issued.

That's incredibly dangerous, and ill-advised. All lost/stolen cards are reported to your file and stay there for seven years. Auto insurance companies have similar policies. If you report your car stolen/damaged, etc., the insurance company keeps that information on your file for five years.

they will then pass you to a collection agency, which is a whole kettle of fish, but at least you're the one controlling if they get funds.

Except that for seven years, that collection is a huge red flag on your credit report. In fact, just one collection, no matter how little the amount owed, is a good reason to deny credit or stick you with the worst interest rate possible.
posted by BlueTrain at 2:49 PM on November 25, 2003


dobbs: dude thanks for your trick it's a valuable one. I have a problem with this trick : one needs to weasel out the cc companies by not telling the truth, which puts you in the indefendable position of being a liar.

I'm not condemning you personally for being smart and for figuring a scheme to escape a very questionable contract , neither do I want to be the judge of your actions.

What I think is that there's something fundamentally wrong in a contract in which one party is charged for actions taken by the other party or other parties AFTER the contract has been ended. Which is to say, a contract that outlives the will of one of the parties shouldn't exist.

So, no matter what the credit card companies made you sign, when you decide to end the contract and let the company know you want to bail out of the contract, it should immediately end. Later, they may ask you to pay a penality if you close the contract that you have agreed not to close before a certain date, but the contract is closed from the moment you let them know you're out of it.

Also, it shouldn't required a Phd in Law to sign a mass-consumer contract like credit cards, for the obvious reason that one party (the consumer) is likely not to have deep enough knowledge of the legal system or the economic resources (read money) to wage a legal battle in which other parties (read lawyers) have a strong interest into.
posted by elpapacito at 3:06 PM on November 25, 2003


One potential solutions to countless credit card issues are the so called prepaid cards

I was going overseas courtesy of my credit card when a dim but rich flatmate says "Man, you're getting so ripped off, you should put it on a debit card then you wont have to pay interest". After trying to explain the concept of having no money, hence why I was borrowing money he retorted "You should still get a debit card."
posted by meech at 3:28 PM on November 25, 2003


The reason why people use credit cards is because they don't have the cash to pay for things outright, including pre-paid cards. That's why the average American is $10,000 in credit card debt by Bluetrain

Yeah let me reinstate: one potential solution to a number but not every credit card issues ...

I agree on the fact that credit card may be often used for their natural purpose, that of giving credit to people that don't have cash or credit ; but sometimes they're used ONLY as an alternative paying method by people that don't know about debit cards. It's not always clear , because of language confusion, that a with a credit card you're borrowing money from the cc company and they may in theory require you to pay interests from the moment you have bought your sixpack ; while with a debit card, you're not borrowing money, you're just using a piece of plastic instead of your cash and you're paying your db/cc company for that service, not for borrowing.

The prepaid card (or shall I say prepaid debit card)adds, imho, a layer of damage containment protection from the scams because you could only lose the amount of money you loaded on the card. By not connecting the prepaid debit card to your bank account (autoreloading) one may be able to limit the amount of fraud a bank could do by autoreloading, for instance by requiring a written paper recepit for each reloading.
posted by elpapacito at 3:36 PM on November 25, 2003


Ops I forgot to mention one thing about prepaid cards: they are unlikely to give interests, unlike many kind of bank accounts. So the money that is loaded on the prepaird debit card is unlikely to give you any interest, while the money in bank account is more likely to, check your contracts and the revisions to conditions you may have automagically accepted.
posted by elpapacito at 3:46 PM on November 25, 2003


Bluetrain: "All lost/stolen cards are reported to your file and stay there for seven years."

Sorry if I'm being dense but... so? What, my credit report says that my wallet was lost affects my credit rating? That's pretty surprising to me (not saying you're not correct). I have a perfect credit rating and have done this. My cards have excellent percentage rates (5.9 - 9 %) and come from the three majors.

I could understand if you did this every three months it'd be suspect but, in case there was some doubt, that's not what I was recommending. I guess if someone already had a bad credit rating and did this it might also look weird but... as I say, it doesn't seem to have affected my rating in the slightest.
posted by dobbs at 7:31 PM on November 25, 2003


I'm with trharlan. I've often wondered why the credit reporting agencies aren't hugely libel-liable. (well, besides the fact that they can probably buy whatever legal exemptions they want.)
posted by hattifattener at 8:26 PM on November 26, 2003


Discover - Paid $1000 at a Sears.

They didn't credit it to my account. That was in May. I called, I wrote letters, and I paid all but $1000 off and stopped using the card in July. Then I stopped complaining in Sept. In late November they called me. I explained how THEY screwed up. In Dec, Discover corrected the problem.

From my POV, I was not 'late payment', yet from the reporting agency and Discover, I was a 'late payment'.

Thugs.
posted by rough ashlar at 4:52 PM on November 28, 2003


From my POV, I was not 'late payment', yet from the reporting agency and Discover, I was a 'late payment'.

Hope they took it off your credit report. If not, you can take them to small claims court and collect up to $1000. Usually the threat of doing so is sufficient to get them to fix it.
posted by kindall at 5:37 PM on November 28, 2003


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