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Credit Cards - Pre-Authorized Withdrawals

I cancelled a product after the free trial period, but the merchant keeps charging my credit card account each month. The bank says to resolve it with the merchant. What should I do?

First, write to the merchant, directing them to stop the charges.

Second, notify your bank in writing about any charges that you feel were in error. (Use the billing error instructions, which should appear on the back of the periodic credit card statement. This address is usually different from where you send your payment.)

The bank must receive your notice of billing error within 60 days of its having sent you the first monthly statement containing the unauthorized charges.

I closed my credit card account, but the bank continued to accept preauthorized withdrawals (such as charges from my insurance company). Why won’t the bank stop accepting these charges?

Generally, your Account Agreement advises that you must cancel all pre-authorized withdrawal agreements with merchants prior to closing an account.

The bank does not cancel these for a simple reason: the pre-authorized withdrawal agreement was made between the consumer and the party making the withdrawals. Since the bank is not a party to the agreement, it cannot cancel it. Therefore, the withdrawals can be charged to the account even after the consumer has closed it.

Copyright 2007 by Mark McCracken , All Rights Reserved