Canceling Your Credit Card May Not Stop Netflix's Recurring Charges (gizmodo.com) 89
Millions of Americans pay for Netflix, doling out anywhere from $6.99 to $22.99 a month. It's a common belief that you can get out of recurring charges like this by canceling your credit card. Netflix won't be able to find you, and your account will just go away, right? You wouldn't be crazy for believing it, but it's a myth that canceling a credit card will definitely stop your recurring charges. From a report: Nearly 46% of Americans opened a new credit card last year, according to Forbes, which means millions of Americans also canceled old ones. When you switch cards, Netflix doesn't just stop your service -- they just start charging your new card. Granted, it might be easier to just cancel your Netflix subscription directly. There's a largely hidden service that enables Netflix and most other subscription services to keep throwing charges at you indefinitely.
"Banks may automatically update credit or debit card numbers when a new card is issued. This update allows your card to continue to be charged, even if it's expired," Netflix says in its help center. Most major card providers offer a feature that enables this, including Visa. In 2003, Visa U.S.A. started offering a new software product to merchants called Visa Account Updater (VAU), according to a 2003 American Banker article. The service works with a network of banks to create a virtual tracking service of Americans' financial profiles. Whenever someone renews, or switches a credit card within their bank, the institution automatically update the VAU. This system lets Netflix and countless other corporations charge whatever card you have on file.
"Banks may automatically update credit or debit card numbers when a new card is issued. This update allows your card to continue to be charged, even if it's expired," Netflix says in its help center. Most major card providers offer a feature that enables this, including Visa. In 2003, Visa U.S.A. started offering a new software product to merchants called Visa Account Updater (VAU), according to a 2003 American Banker article. The service works with a network of banks to create a virtual tracking service of Americans' financial profiles. Whenever someone renews, or switches a credit card within their bank, the institution automatically update the VAU. This system lets Netflix and countless other corporations charge whatever card you have on file.
So... I'm confused. (Score:5, Insightful)
Granted, it might be easier to just cancel your Netflix subscription directly.
Why not just do that? Seems way more straight forward.
Re:So... I'm confused. (Score:5, Informative)
I don't know about NetFlix, but plenty of companies deliberately make the process of severing contracts exceptionally difficult so you give up and just pay.
30 seconds to sign up, but days of being on hold for the retention department to escape.
And it's not actually fraud, so you can't get the billing denied by the CC company on that basis.
Dispute? (Score:2)
After making a good-faith effort to cancel the service, which could include a snail mail letter, could a person dispute the charges, either to your credit card company or through one of the three credit reporting agencies?
It doesn't have to be fraud to dispute a charge.
Re:Dispute? (Score:5, Informative)
This is seriously a non-existent problem. If you want to stop paying for a service, there are cancellation functions. The easiest thing you can do if a service has an arduous cancellation policy is call them and revoke their authorized use of your payment method. I have had to do that once, when a gym wanted me to come in to cancel membership. I asked the rep to send me their policy in writing, and replied to the email with my demand, and a citation of state law section that mandates that.
Re:Dispute? (Score:5, Informative)
I have learned the joys of virtual card numbers. A different number for each online merchant, that I can lock or delete instantly in the app.
And when I lost the card, the number on the plastic changed, naturally, but none the virtual cards were affected.
Re: Dispute? (Score:2)
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This is seriously a non-existent problem. If you want to stop paying for a service, there are cancellation functions.
There's a problem, maybe you feel differently. The problem is that businesses aren't required to get automatic renewal consent separately from payment information. If I want one month of a service, I shouldn't have to pay for it, then spend time browsing their site until I find an unsubscribe button. Same for annual services. A simple check box during payment is all I'm asking for.
Another problem I've seen and maybe needs regulation is how ending automatic renewal is handled. Some sties call it cancell
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Then you have none of the information required to shut down the account and requesting a new card just shifts the charges to the new card.
Ask me how I know. Ended up putting a merchant block on Microsoft on the card.
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Call them?
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Many retailers (including card services) make it functionally impossible to call them.
RFT!!!
Dave Kelsen
--
When the only tool you have is a claw hammer every problem starts to look like the back of someone's skull.
Re:So... I'm confused. (Score:5, Informative)
Yes, many companies do that, but AFAIK Netflix does not. My sister cancelled her Netflix account about a year ago and it was apparently very easy and painless to do.
This page [privacy.com] outlines what looks to be a pretty straightforward process.
Re:So... I'm confused. (Score:5, Informative)
I cancelled our Netflix subscription several months ago - it was definitely straightforward and painless.
I am not surprised, though, to see a Gizmodo blogger putting forward a hair-brained scheme to pointlessly complicate a simple process most people already have no problem understanding. That's what non-technical people who masquerade as technical people do.
Re:So... I'm confused. (Score:4)
True, it was easy for me. But Netflix is just one of many, the story just highlighted that name because presumably it would get more eyeballs that way. Many companies make things difficult. As in, sign up easy online, but have to speak on the phone to cancel with the long wait, never mind younger generations who recoil in horror at using phones to make phone calls. (I laughed at a youtube channel of millenials where they mentioned one member was the go-to person who didn't mind making a phone call when needed)
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Eventually your lawyers will become involved and that's really not going to be cost effective for you and the lawyers being natural parasites will be glad to have me creating billable hours for them.
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This can get really difficult at times. Oftentimes, someone cancels a card, and 3-6 months later, a constable is at the door serving them paperwork for a lawsuit filed in another state saying that they owe more than $1000 in late/past due fees.
With some products, the only real answer is having a lawyer write a C&D order, which often has to be done. Especially when product "A" gets company "B" to piggyback and start charging a subscription after a year or so.
If I have to cancel something, and it isn't
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I had this same issue, and then switched to using privacy.com virtual credit cards to solve this.
Remembering to cancel never worked, and some places don't allow you to disable auto-pay when you first sign up. You have to go in afterwards to do it. Amazon is even more insidious. If the credit card you use for Prime expires, it will switch to any other valid credit card on file you have, even if it wasn't used for Prime.
Switching to privacy.com stops all that. Each store gets a virtual credit card, and I
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I don't know about NetFlix, but plenty of companies deliberately make the process of severing contracts exceptionally difficult so you give up and just pay.
Select Account and then Manage Membership. The cancel button is a large red one that says, "Cancel Membership". So it is definitely easier to just cancel your membership than to cancel a credit card to avoid subsequent charges. In fact, anyone who cancels a credit card just to avoid future Netflix charges is a flaming moron.
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Indeed. Cases where canceling the card may be a valid option - and note, you have to cancel the card, IE drop the card with that bank completely, not just get a replacement card, would be things like gym memberships, car wash subscriptions*, etc...
I almost signed up for a car wash subscription, as bonus it covers a number of washes in the general area - but it automatically renews every month, and you must cancel at the store you signed up at. They billed being unable to cancel otherwise as a "Security fe
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I came to the comment section on this story, expecting people to be tal
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Unfortunately, our society...has trained a lot of people to believe that it's going to be extremely difficult to ever get a company to voluntarily stop billing you every month.
I see where you're coming from, and it's sensible enough. I subscribed to Urban Air for my kids, and canceling was very difficult*. And I've heard stories about other companies. I was limiting my thoughts to the topic at hand in this case, though, and not about bad companies in general.
* I looked on the website, and there was no option to cancel anywhere. I called the location we visit, and they said they couldn't cancel memberships. I don't remember if I found the phone number in the signup contract I save
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Right, I'm just saying, I can understand why some otherwise reasonably intelligent people might imagine they needed to involve their bank in the process of stopping the billing. Even if they don't have personal experiences with needing to resort to such measures, they've probably heard horror stories.
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And it's not actually fraud, so you can't get the billing denied by the CC company on that basis.
Yes. Yes it is fraud. If the company was not given the new number by the customer, then it is very clearly fraud.
I know we will disagree. I don't care. You are wrong. If the customer wanted to continue paying, they would have given the company the new number. The service should stop as soon as payment is not received, new methods of payment should be prohibited from being sought after by the company except directly with the customer themself.
it IS fraud (Score:1)
It *IS* fraud because I never gave them this credit card to charge me on. Saying it's not fraud would mean anyone I buy something from could charge me on any credit card they wanted, not just the one I gave them.
Late last year I cancelled a Citi credit card dues to come actual fraud charges. A month later, a charge appeared on the replacement card from an organization that had been billing me monthly for something. I flagged it as fraud in my online console, noting I had given the new card number to
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I dunno. Some people may not realize, or check their credit card statement for unusual payments. I had a friend who was subscribed to something well over a year past actually using it, and he said he just never got around to it (well, he has some problems but I suspect others might be in the same boat). Or you just don't know your password or how to login, your smart device is remembering all the details... Basic disorganization.
Also after trying to clean up accounts for my mother due to fraud and cleani
Fraud Netflix charge - Neflix won't ID account (Score:3, Interesting)
Virtual Card Numbers (Score:5, Interesting)
When I buy something using a CC that auto renews, I use a feature my CC company offers: virtual card numbers. I set the credit limit on the virtual card to $1 more than what I'm buying and the expiration date to next month. When the next renewal cycle rolls around, the virtual card number I used will have expired.
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The virtual cards on the CC I use can be locked. I have such a card on record at netflicks and so far nothing has been charged.
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Same here, locked or just deleted, instantly, in the app.
And the virtual numbers stay working if I lose the card and get a new one. When I lost it, it was the most painless replacement ever.
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I started doing the same after our local newspaper tripled its price, required you call in to cancel, and after waiting on hold forever, dropped the call when I said I wanted to cancel. They did allow me to "update my payment information" online, so I switched to a virtual card with a short expiration date and problem solved.
Not a Netflix issue - A banking issue (Score:4, Informative)
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When you report a card as stolen, you usually tell the bank what transaction(s) are fraudulent. If you don’t flag anything as fraudulent then yeah it could magically pop up on the new account.
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I'd imagine that they'd have reported the uber eats somebody else was ordering as fraudulent.
I've heard of banks eventually figuring out how to prevent said charges, but you have to get somebody who knows how. Keep disputing the charges. They should figure it out.
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Remember, going higher doesn't necessarily mean getting somebody who knows how. Especially when you go to the government and not the bank's troubleshooter employees.
I'm just saying that I read a very similar story once, and they were able to stop the charges the 2nd/3rd time around, but he actually had to go into the bank and work with somebody.
Re:Not a Netflix issue - A banking issue (Score:4, Informative)
Cancel the card entirely, and get a new one from a different bank.
Or just report it stolen, which is obviously is, and point out that he's no longer responsible for any charges on it by law.
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Just went through it in January-March. Reported out Chase bank credit card stolen and canceled it. Charges appeared on the new card before it reached us in the mail. Reported this to Chase in a lengthy phone conversation and was assured all was well. Same thing for the next card they sent. And once more, reported it to them as stolen, fraud, every buzz word we could find over the phone, no avail.
Nowadays, if your card is stolen, you need to just stop doing business with the issuing bank entirel
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Or just use virtual numbers for anything online, as others have noted.
(And yes, credit card numbers can be stolen in brick and mortar stores, too. I have more than one credit card. One for online, with only virtual numbers, and one for brick and mortar, that is never used online.)
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Put another way: I cancel my cellphone service because of an abusive ex. I need a valid phone number however because everyone in society demands it, so I sign up for a different number. What should people call that abusive ex being told my new phone number by the serv
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There's an actual reason why you can't. Fraud prevention.
The actual angle here should not be to decrease fraud protection, but increase consumer protection. For example, legally mandate that it's just as easy to unsubscribe from recurring service as it is to subscribe to it. Or legally mandate an easy accessible, easy to use unsubscribe page that must be advertised with every invoice.
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Changing your card is
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Two things need to happen:
Legislation to make cancelling subscriptions take less effort than signing up
Legislation to force banks to show you all recurring charges/preapprovals on your card (Netflix, Uber, etx), and allow you to cancel them from that side.
First one makes it harder for companies to be dicks about subscriptions. Second one helps you enforce that PLUS stop fradulent charges.
I don't mind a service like VAU if I can have control to roll back any approvals in less than 10 seconds.
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I had the same issue with my father's account once he gave me access to it. He had several dozen Uber Eats charges along with other fraudulent charges. I reported the activity to the bank's Fraud department and went to the bank to close the account and set up a new one with a new card. My father got back almost $6000 and there were no more charges. I still check his account daily, though.
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My friend could not get it stopped even by going through his bank that issued the card. They just seemed to be able to nothing about it. This should be something you can opt out of.
I am certain there is a legal framework somewhere supporting this. It is criminal, even if, or especially, because it is convenient for businesses. It's ok. We are just supposed to be raw stock to be milked. We are not supposed to have any agency whatsoever. Smile and enjoy. Smile and enjoy.
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He cancelled the card an got a new one and kindly the bank gave Uber the new card number and the charges started again.
This was my first thought as well, what's even the point of cancelling your credit card due to fraudulent charges if the bank is just going to give the vendor your new card details. I'm not sure how this works because don't you still have to enter your CVV at some point when you update your card information. The fact that this isn't opt-in and turned off by default is just mind boggling and just begging for some kind of class action lawsuit.
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This is not a Netflix issue. This is a banking issue. I have a friend who had someone charging uber eats charges to his card. He cancelled the card an got a new one and kindly the bank gave Uber the new card number and the charges started again. This is a service to the vendors by the credit card companies. My friend could not get it stopped even by going through his bank that issued the card. They just seemed to be able to nothing about it. This should be something you can opt out of.
This isn't something you should be able to opt out of... it should be something that shouldn't even be permitted to exist.
I'm yet to hear of another banking system that will provide merchants with your new card detail, in Australia and the UK it's clear that updating continuing payments is 100% the end users responsibility. The bank will not and cannot legally divulge any information about you to merchants. The closest we've got to it is that if I changed banks using the switching scheme here in the UK m
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This should be something you can opt out of.
You can indeed opt out of it. For Visa, you call and say you want to "opt out of the VAU", i.e. the Visa Account Updater
I had a similar experience as you, 1st agent was saying there was nothing I could do, 2nd agent told me out to opt out of it.
Bad guys auto update? (Score:4)
A "convenient feature"... maybe... but what is to stop nefarious actors from also using this to continue to charge me?
False (Score:5, Insightful)
This is false:
Canceling -- that is closing -- a credit card will definitely stop recurring charges. The article is really talking about what is admittedly the more common scenario: asking one's credit card company for a replacement card and number. The article is correct that in that scenario, the charges will still keep coming.
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This is false:
Canceling -- that is closing -- a credit card will definitely stop recurring charges. The article is really talking about what is admittedly the more common scenario: asking one's credit card company for a replacement card and number. The article is correct that in that scenario, the charges will still keep coming.
I've never once had this happen for me. In fact, one time I almost lost my auto insurance because the credit card on file had expired and I hadn't updated it.
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Correct. It works both ways -- it depends on how the merchant set up the recurring charge with the credit card company. So that means if one isn't sure (which one usually is not), if one can tolerate one more month of charges, then try the new card number thing first, and if that doesn't work, cancel the card account. Note that this will negatively affect "average age of accounts" on one's credit score.
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Just you wait until it happens to you. I assure you, it DOES happen and there's nothing you can do.
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No it doesn't
I had an Amex card that I closed.
When a company whom I had cancelled a recurring charge with decided they wanted to keep billing me, Amex reactivated my closed account and sent me the bill.
They attitude was tough luck.
I'm surprised Amex is still around.
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Their attitude was "tough luck"?
My response would be simple: You just gave away your own money. I didn't authorize the account to be re-opened, for that recurring charge to be authorized, etc... You just illegally opened an account in my name without my authorization. Go bug that company for your money back if you want. I'm not paying. I will back that up with legal action if necessary.
Fortunately, I've never had to do that.
I Already Know (Score:3)
This applies more to gym memberships (Score:2)
Netflix and other legitimate services generally make it painless to cancel the service.
With gym memberships, you may need to get comfortable with the idea that you have to close out the account with the bank entirely. When I had an issue with a gym, the customer support rep knew exactly what to do and that was the end of that. And I didn't need to switch credit card companies.
But, your results may vary.
Use Virtual Card Numbers (Score:2)
Slightly different than I remember (Score:2)
I worked for a company which used a card auto-updater feature. Only thing is, it would only update if the expiration date changed. I know my bank keeps the same number when the old card expires; they only change the card number if the card is lost or stolen.
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It'll pick up new card numbers too. TSYS's EnsureBill is one such service. Visa and MC also provide it direct.
That explains it. (Score:2)
I've been fighting reoccurring fraud charges on one of my cards for fucking YEARS. This explains why, after canceling my card, I soon start getting new charges on the replacement.
Absolutely infuriating.
Meanwhile in Europe (Score:2)
They need to make cancelling obvious and easy. It's the law. Well, I guess Europe is doomed to economic failure with all its pro-consumer crap, right? Right?
Really Hard to get Rid Of (Score:1)
Gyms. Usually takes several tries and special stuff like snail mail. I got it done, 'cuz the chain gym I was a member of only has a facility about 45 miles each way since I moved. Would LOVE to attend but wow, the gasoline. Maybe when electric cars are where it would pay me to get one, then maybe. Was really happy with that gym - Gold's. Maybe if I combined the trips with the really-cheap-ticket Regal movie theater 1-price-per-month deal, it might start to make sense. Not enough movies coming ou
Simple solution (Score:2)
Cancel your bank.
Not always (Score:2)
When my CC expired late last year, Amazon Prime Video cancelled my service -- even though I updated the details online after they sent me notification that the CC had expired. Netflix however, didn't do anything and I didn't update the details on their service - but they keep billing me.
So why does Netflix have auto-update but Amazon doesn't?
Crazy world!
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Why does ANYONE have auto-update?! What the hell is the point of the expiry date if they just roll over to the next card?!
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Let us handle your recurring billing for you, for a fee that is conveniently a little bit less than it probably would cost you otherwise.
We'll even make sure the transitions from card to card of your customers are seamless.
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Well, it sure would explain why the account I once made for an MMO called Rift got compromised like five, six years later and could somehow be used to purchase a lot of stuff for another game from the same provider, despite the card attached having expired several years prior ...
you indeed opt out of the VAU (Score:5, Informative)
I had this exact scenario happen to me after dealing with my kid's CC getting compromised. Suddenly Uber and DoorDash were all in use again even on the replacement card.
I found out that certain special companies like Uber and Netflix have a "special" relationship and they just get the new card numbers. I complained how that defeated the whole point of using replacement cards for security, and the agent was explaining I don't really have a choice, that I should just try to cancel my company subscription / account instead.
And what do you do if you deal with an uncooperative shady web site?
Very infuriating.
Calling again, I got another agent who was sympathetic about my security concerns, he explained that there that there is an explicit Visa Account Updater (VAU) program, and that you can indeed opt out of it, saying that I just need to ask to "opt out of the VAU", I am not interested in that service.
So, calling back afresh one more time I did just that, and lo and behold that took me out of the VAU.
The next time my kid's card got messed up (teenagers! someone was stealing their Uber rides), I got the card replaced yet again, and this time all services were blocked until we gave the new number to those services that we trusted and wanted to continue.
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I never authorized the VAU usage though, that was something that was opted in by default as far as I can tell.
I always operated with the understanding that issuing a new CC number means I have to update all my services explicitly. This was true until fairly recently when the VAU kicked in.
The "special relationship" was in fact how the visa agent explained it to me, not my choice of words.
We are screwed. (Score:2)
Fraud (Score:1)
Never subscribe and never a problem. (Score:2)
Anything worth watching is worth pir8ing.
Charges schmarges (Score:2)
Visa only? (Score:3)
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Mastercard must have it too, as I have a few vendors that will automatically get the new information.
Companies do all kinds of shady shit with recurrin (Score:2)
I subscribed to a streaming service that subsequently put up their price. At the time of the price increase, they required me to accept the new price. The streaming did not work without this acceptance.
I did not accept the new price and the streaming service no longer worked. However, they kept billing my credit card at the old rate.
I did not realize this for some time and when I did, I disputed the charge for that month, which was quickly refunded. Then they charged me the next month. Because they had forc
What idiot wrote this?! (Score:2)
Just walk away (Score:1)
This is why it’s perfectly OK to walk away from credit card debt. Just stop paying, and ignore all attempts at collection. Sure the made up number they use to rate your ability to be profiteered off of may fall, but that number has no value to you.
You’re going to hear from a lot of capitalists about this comment now, and how that would cause the system to fall apart, but hey, if the system isn’t helping you, who cares if it falls apart.
Don’t treat banks or corporations civilly, they
Hilarious in Hindsight (Score:2)