This is specific to American Express, but I’m sure it’s an issue with other credit cards as well.
I’ve always believed that if there was a charge on my card that I didn’t agree with, all I had to do was call the credit card company to get it removed.
In the past, when it’s come up, that’s exactly what I’ve done, and there’s never been any hesitation on the part of the card company.
Apparently I was wrong.
Today I hit an interesting issue, and I’m both surprised and disappointed in American Express’s policy regarding recurring or negative option billing.
In December of 2006 I purchased a 2 year membership to Classmates.com. This was before Facebook pretty much destroyed their business model.
I received an invoice from them at the time which states the 59.00 USD fee was for a 2 year period.
Nowhere on the receipt does it indicate that I’ve agreed to any kind of automatic renewal or recurring billing, but it does indicate a ‘renewal date’ of December 2008.
When I received my Amex bill in the mail today, there was a 59.00 USD charge from Classmates.com. I called Amex to ask them to remove the charge.
Not so easy.
According to Amex, because the merchant (i.e. Classmates) has indicated it is a recurring charge, Amex will not reverse the payment without proof that I’ve canceled my membership.
Ok. So, with the Amex agent on the line, I pull up my receipt and send it to her:
The agent then tells me that nowhere on the receipt does it indicated that I’ve NOT agreed to renewal.
She then looks online and says that the Classmates site indicates that memberships are automatically renewed. Maybe today it does, but that doesn’t mean that it did in 2006 when I did the original transaction, and beside, the receipt doesn’t indicate that.
Not good enough says American Express. I need to prove that I haven’t renewed, some VALID indication that I DIDN’T agree to autorenew.
Hmmm. Me on the phone saying I didn’t ? Not good enough.
Of course it’s impossible to call the vendor (American Express even tried with me on the phone) and an email to them results in an auto reply. Interesting, the reply explains how to turn off auto renew (even though I never turned it on).
The problem is that only stops it for the next renewal, scheduled for December 2010, and doesn’t help me with my current billing problem.
Surprisingly, neither will American Express help me.
Classmates.com is essentially using negative option billing. It’s a terrible business practice.
The Government of Ontario even has an advisory on their web site about it. They’ve even passed laws to try to stop it. Did I mention that it’s a terrible business practice – desperation really. I’m surprised that American Express is so supportive of merchants doing business this way – to the point of siding with them over their card holders.
According to the agent, if the vendor claims the charge is recurring, then American Express takes the side of the merchant, until the customer can PROVE they didn’t agree to a recurring charge. And from my example, supplying a copy of the receipt that clearly indicates a 2 year term and DOESN’T indicate an autorenewal just isn’t good enough.
Based on this position, any merchant you’ve ever conducted an online transaction with, who claims to have a recurring billing arrangement with you, CAN put through a charge. And your credit card (or at least American Express) will not reverse if if you call them to tell them you never agreed to such a thing.
Ironically, our credit card companies have for years been trying to reassure us that online purchasing can be safe. Here’s a straight forward example where the immediate response from the card company should be simple:
Remove the charge. The client says they didn’t authorize it. Simple.
Instead. American Express sides with the vendor, leaving the customer hanging in the cold. The problem with this of course is that any merchant I’ve done business with in the past could easily put through a transaction for any amount claiming it was a ‘renewal’. As I said at the top, I’ve always believed that solving any such problem was as simple as a phone call to the credit card company, Apparently not so, as long as the vendor claims it’s a recurring charge.
What’s irritating is that the agent at American Express kept saying that I “must have agreed to recurring billing” when I did the original transaction. I explained over and over that I did not, regardless of what Classmates.com claimss. There’s any number of changes they could have made to their policies in the 2 years since my original purchase, and even sending a copy of the receipt to Amex didn’t change their position one bit. I really annoys me that they can be so dismissive of a customer, while that customer is on the phone with them.
Perhaps Amex should be advertising with the words of the agent who was on the phone with me: “If you’re going to buy on the internet, it’s buyer beware”
I’m sure I’ll eventually get hold of someone at Classmates.com and will get the charges removed, but if you can’t reach the merchant, good luck convincing your credit card company that you never agreed to be billed on a recurring basis.
Doesn’t inspire confidence.