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Credit Card Updater Services May Result in Unexpected Charges

When MrConsumer received a replacement Visa debit card from his bank because the old one was about to expire, there was a small note inside:

*MOUSE PRINT:

“Visa Account Updater: Your Salem Five debit card now includes Visa Account Updater. This feature automatically updates your debit card information with participating merchants you have recurring payment relationships with when your card is renewed or reissued at expiration.”

In other words, if you have certain bills like utilities, cable, or mail order pharmacy on “autopay” meaning they automatically charge your credit card or debit card every month for the balance due, Visa will tell those merchants your new expiration date or card number whenever the card is replaced.

This is good in many respects particularly for people who don’t want to be bothered having to contact each merchant with the new information, and to avoid bills not being paid on time because the card expired.

But it could also pose a problem for cardholders who deliberately give a company a soon-to-expire credit card number because they don’t want the plan they may have signed up for to self-renew. For example, you may not want your gym to keep billing you after your contract is up, or you took advantage of a free trial offer somewhere, and you don’t want them to keep charging your card because you don’t trust them.

Recently a Boston-area consumer thought the only way he could ensure that the bankrupt Boston Sports Club would stop charging her monthly fees for one of their closed locations was to change her credit card number… but he was wrong. The company transferred his membership to a new location and because of this credit “feature” they were able to start charging his new card the monthly fee again.

Some scam artists have even discovered how to use these card updater services to continue to defraud victims.

Visa is not alone in telling merchants about your new card. MasterCard has a similar program called “Automatic Billing Updater” as does American Express (“CardRefresher“).

My bank allows cardholders to opt-out of the automatic renewal notification service. (See how their Visa updater program works.)

If you don’t want your card issuer to automatically notify the companies to whom you have given your card number about updates to your card, ask if you can opt-out of that service.

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13 thoughts on “Credit Card Updater Services May Result in Unexpected Charges”

  1. In the case of “cardholders who deliberately give a company a soon-to-expire credit card number because they don’t want the plan they may have signed up for to self-renew. For example, you may not want your gym to keep billing you after your contract is up, or you took advantage of a free trial offer somewhere, and you don’t want them to keep charging your card because you don’t trust them”, I learned from a friend to use those rebates that are issued on a prepaid VISA card for those self-renewing free trial offers. If you don’t have one, or even if you *do*, just don’t sign up for those offers in the first place and you’ll avoid the problem!

  2. Interesting article because I had no idea the credit/debit card issuers could exercise such an expiration date autorenewal option. What’s also interesting is that to opt out of the autorenewal policy, you can’t do it online–you have to call. “…you can opt-out of VAU at any time by contacting our Contact Center during normal business hours at…” I’m sure that many would find that intimidating or too much of a hassle to bother. The worst part of it is that I think most people don’t even know about the Visa/Mastercard tactic, including me, previous to the Mouse Print article.

  3. If the credit card expiration date can be updated by an Updater Service, what’s the point in having an expiration date in the first place? It would be similar to a store requiring a coupon for the ‘one dollar off’ special. When you ask where can I get a coupon, they point to the stack of ad papers by the door.

  4. Two separate issues here. When my current credit card expires and I am routinely issued a new one with the same number I really appreciate having that information automatically updated with those folks whom I’ve set up automatic payments. Normally credit card numbers do not change just because the old card expired so all that’s being updated is the new expiration date.
    On the other hand, if I request a new card with a new number I think it should be assumed that I’m changing this because my old number has been compromised in some way – even if the compromise is wanting to avoid some continuing charge. In that case, I don’t want the information automatically updated with anyone. I would prefer to do it myself.

  5. “But it could also pose a problem for cardholders who deliberately give a company a soon-to-expire credit card number because they don’t want the plan they may have signed up for to self-renew. ”

    In other words, this prevents you from using the CC expiration to not live up to your commitment with various companies.

    If you don’t agree to their terms, don’t do business with them.

  6. A better option, especially for online payments, is to use a “virtual” credit card number. You can set the expiration date and maximum amount that can be charged. So once the max limit is reached, further attempts to charge to that number will be rejected. Also, once the merchant uses the card, charges attempted to that number by anyone else will be rejected. Unfortunately, most banks do not offer this feature. One bank that does is citibank.

    Edgar replies: Bob, a while back I read a consumer complaint where someone had used a virtual card, and despite the expiration date, a charge was subsequently made against it. Nonetheless, I really LOVE virtual cards.

    • That may be true, but I know that if you set the maximum amount that can be charged to the virtual number, and the merchant tries to charge above that amount, it will be rejected. At least, that’s been my experience with using virtual numbers. I often use them for trial subscriptions, or if I want to make sure that my card won’t be charged past a certain amount unless I decide to renew a subscription and increase the amount.

    • I had the Citi desktop app and used virtual card numbers for years. I loved it, but several years ago it became really buggy and I finally gave up out of frustration. I realize that I can log into my account on Citi’s website and get a virtual number, but that’s a bit more of a hassle than it’s worth. It’s been a while so maybe some day when I’m up for the aggravation I’ll try downloading and using the app again. I did feel more secure when I was using them.
      It’s also worth noting that virtual numbers can only be used for on-line charges so it’s not likely to do you much good if you are signing up for a gym membership.

  7. Also be aware, something similar often automatically updates your card number, too. I’ve had a credit card compromised in the past, and for some ridiculous inexplicable reason fraudulent charges that continued to be placed on my old card got transferred to the new one, which obviously completely nullifies the purpose of getting a new card number. Banks are rarely pro-consumer

  8. Most of the digital/corporate world is a scam. Just like I’ve gone back to shopping in store (preferably small, local businesses,) I’m going back to using cash.

  9. I use Citi’s virtual account numbers (VAN) for free trials and subscriptions at risk of auto-renewing. It’s great. I control the maximum amount that can be charged to the virtual card, and the expiration date.

    Rather than this automatic update service, it would be more helpful if the bank could send me an alert when it detects a recurring charge associated with an expiring card number (including VANs). If they want to get fancy, then let me respond to those alerts on their web site to decide if the vendor should get the updated information. There are options here to make things convenient and safe for customers.

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