5 key steps to avoid the recurring payments cancellation trap: Internet Scambusters #680
Are you overlooking or just ignoring automatic, recurring payments for subscriptions and services you don't use?
And what do you do if you run into problems trying to cancel them?
It's a common problem that can cost hundreds of dollars or more -- we'll tell you how to deal with these challenges in this week's issue.
Let's get started...
How to Identify and Cancel Troublesome Recurring Payments
Have you ever checked your credit card bill or bank account statement and realized you're making regular, recurring payments for subscriptions you don't use?
Maybe you signed up for a free trial of some kind of program and didn't follow through on the options to cancel once the free period expired.
Or perhaps you simply subscribed to a pay service you no longer use and just never got around to canceling.
In some cases, you may have tried to cancel only to find it's a complicated process that defeats you, or even that the relevant website doesn't seem to actually have any information on how to cancel.
Perhaps there's a notice period that you didn't realize you'd signed up to, meaning you have to continue paying for a couple months.
These types of tricks are known in the trade as "stealth retention programs" -- they sneakily try to keep you paying long after you finished using whatever they offer.
In yet other cases, companies update their services or cut the price of new subscriptions without telling established customers who continue to pay excessive fees for low-value services.
For example, according to the consumer news site consumeraffairs.com, one email service provider continues to charge customers $30 a month for a service that used to cost that much but is now essentially free.
In another incident, a member of the Scambusters team discovered he was paying top rate for the slowest broadband service from his Internet service provider (ISP).
He only discovered this when his modem failed and he called out an engineer from the company.
The modem was so old, the engineer didn't even recognize the model. A new modem gave him Internet speeds 10 times faster -- and he ended up paying less for it!
But often the biggest challenge lies in actually trying to change or cancel a recurring payment service.
The fact is that if you do an Internet search on the term "can't cancel subscription," you'll find all manner of users who are struggling, often with big-name well known firms, to cancel monthly payments.
To avoid getting caught in these kinds of traps or to elicit prompt action when you need to cancel, here are five things we recommend you do.
1. When you're signing up for any service, either online or on paper, find out what the cancellation process is first.
Search the FAQs on the website of the organization, email customer service or just do a Google search to identify the process, especially relevant phone numbers, and then keep a note of them.
Use a search term like "how to cancel a [insert company or service name] subscription."
Sometimes, organizations use third parties to handle their payments so you need to note their contact details too.
2. Regularly review ongoing services you're getting and make sure you know what you're paying for.
Scrutinize your monthly credit card or bank statements and reconcile them against services you use.
Even if you are using the service, contact the sales department now and then to ask what their current fees and service levels are.
If you find you're paying too much, tell them and ask for your fees to be reviewed.
3. If you're paying for something you don't use, attempt to cancel it.
If you didn't collect the details we outlined in point #1 above, do the following:
- Check if there's a phone number listed against the charge on your account statement.
- Visit the website of the organization and check for details of the cancellation process.
- If you don't see these details, find the customer service or sales number and contact them.
- Take the name of everyone you speak to and keep notes of their response. If possible, record the call (tell the other person that you are doing this).
- Tell them you want to cancel with immediate effect and ask them specifically to confirm that your subscription is cancelled.
- If they claim the subscription can't be canceled or that there'll be a delay, ask them to escalate your request to a supervisor.
- Keep a written record of everything you do, with dates, names and so on.
- Be patient. You could be on the phone for a while. Connect a headset to your phone so you can do something else while you're waiting to speak to the relevant person.
4. If you don't succeed with this process, find the head office address of the organization and send a certified, return-receipt-requested letter notifying them of the cancellation.
Consumeraffairs.com suggests including wording such as:
"I hereby cancel my account provided under the user name [user name] and revoke any existing authorization to draft my credit card, debit card, PayPal account, checking account or any other financial account you may have accessed.
"I further request a full refund of all payments from [date] until the present time."
5. If this doesn't produce results, complain to your state Attorney General, the Federal Trade Commission and your Congressional Representatives.
Another possible route is to contact your credit card company and ask them to cancel the recurring subscription.
But different card companies have different rules and it might not be as straightforward as you might think.
In a worse case, you could actually cancel your card membership, then the payment simply can't be made.
However, unless you've followed through on the other steps we've outlined, you could find yourself on the receiving end of a debt collection demand -- you absolutely must have proof that you canceled the service.
Life is expensive enough so don't get caught out paying for something you don't use. Get checking those statements for recurring payments now!
Alert of the Week
Did someone in your home just order a pizza by phone?
If you're a pizza-loving household, maybe they did and maybe you won't be surprised when the phone rings with news of problems with the credit card they used and a request for an alternative card number.
But before you give them one, STOP! Check if your family member or home sharer did indeed place that order.
Otherwise, you've got an ID thief on the line -- and you won't be getting any pizza either.
That's all for today -- we'll see you next week.