When Carmen and I started researching for CarePlanIt we were surprised at how many seniors lost control of their finances. By losing control, we mean spending at a rate that was unsustainable. A common manifestation of this were recurring payments: payments that should have been modified or stopped years earlier. What are the issues? How do you address the issues?
Explanation of Recurring Charges
In today’s world of online payments, many of our expenses are processed as recurring charges. A recurring charge is one that is authorized to recur over and over again. They’re usually attached to one of our credit cards. Each recurring period (usually monthly or annually) a charge gets placed using our credit card.
Canceling these charges and sometimes identifying them can be a challenge. The charges themselves are usually authorized by a contract.
Common Recurring Charges
The most common recurring charges are listed below.
The Legal / Legislative Framework For Recurring Charges
The Electronic Funds Transfer Act (EFTA) – 15 U.S.C. §§ 1693-1693
The EFTA establishes the responsibilities, rights, and liabilities of participants in electronic fund transfer systems. The EFTA requires financial institutions to adopt protocols and practices concerning transaction accounting and error resolution. The EFTA requires financial institutions and others engaging or participating in funds transfers to have procedures for preauthorized transfers. The EFTA sets liability limits for losses caused by unauthorized transfers that violate these procedures. Covered areas include online transactions, ATMs, debit cards, direct deposits, point of sale transactions, transfers (those initiated by phones or those pre-authorized from checking or savings accounts).
The Teeth in EFTA
The EFTA puts some teeth in your request and attempts to cancel a recurring charge. But it doesn’t negate your requirement to know what you are doing. In other words, you need to understand the transaction and need to follow the cancellation or termination required by that transaction. This may involve more than one party. For example, you may have a recurring charge to your credit card for a magazine subscription. You can’t just cancel or deny the credit card charge. Technically, you need to cancel your agreement, and recurring charges, with the magazine.
How To Cancel A Recurring Charge
To cancel a recurring charge you should know something about what makes up a legally created recurring charge.
What Is A Legally Created Recurring Charge
1. Legal recurring charges are authorized.
2. This authorization is via a contract (aka agreement)
3. The contract defines the terms and conditions of the recurring charge and must be in compliance with EFTA.
Steps To Cancel A Recurring Charge
Get The Contract & Understand What You Agreed To
1. Get a copy of the agreement that allows the company to charge you on a recurring basis. You can call the company applying the charges. Also, check the company’s website, they usually have the agreement available. You were also probably emailed a copy of the agreement or a link to the agreement.
2. From the Agreement, find the answer to these questions:
2A. How do I cancel
2B. What charges are stopped?
2C. What are these charges (the amount, the frequency or when billed)?
3C. Are there any charges that will appear after my cancellation
3Ci. What are they
3Cii. How much are they
3Ciii. When will these stop
How To Cancel
Through The Charging Company
The best way to guarantee the cancellation is completed is to start with the charging company. This is the company with whom you have the Agreement.
A. Online. Some companies make it easy to cancel online. Use this method first, because its fast, and the company should give you some confirmation notice. Type into google the company name an “How to cancel my subscription” using the quotes.
B.Via written notice. All companies have to have a way to contact them by mail. See Terms of Service on their website. But ensuring that your cancellation letter gets to the right department may be more difficult. Regardless, write the address in the Terms and Agreements and request that your agreement be terminated immediately.
c. Via email notice. See Section A above. If you can find the charging companies cancellation/termination email, sending t this email is best. However, if you can;t, sending to the company’s “support” email and asking them to forward the request to cancel email to the proper department is a start. Note: You can use this attempt when your credit card company or bank asks for what you’ve communicated with the billing company.
Using Your Credit Card Company or Bank
The second best way to cancel recurring charges is through the financial institution that processes the payment. This is either your credit card company or bank. Generally, when you contact these institutions they will ask you what efforts you have made to cancel through the charging company. That’s why doing that process first or in parallel is helpful.
1. Identify the payment processor (credit card company or bank).
2.Call your bank or credit card company and dispute the charges.
3.Send them any correspondence or efforts made with the charging company.
Document All Your Actions
1.Generally. You need to document your efforts. All your documentation should include, at a minimum, the following: the company your talking tom the representative your taking to, the representative’s identification number (name or location), the date and time of your conversation.
B.Some states allow you to record these conversations (some state require the other party to also agree to the recording).
3.Confirmation receipts, emails and ticket number.
A.Most companies now use some form of customer service software that allows them to do one or more of the following. Send a conformation of the resolution. Send an email describing the problem and what will be done. A ticket or issue identification number.
If It’s Not Working
1. Most legitimate companies want to help. Especially if you’re a senior or trying to help a senior. If your efforts are running into problems, call the company and ask to speak with a payment resolution representative. Explain that you’re senior (or calling on behalf of a senior) trying to cancel recurring charges and terminate any contract. They will usually help.
2.Dispute via your payment processor (i.e., bank, credit card company, payment processor)
A. Ask them where to send your documentation showing that you tried to cancel through the company that is applying the charges
Some online websites that address these issue: