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closed credit being reopened and payment taken

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  • 23-06-2011 5:34pm
    #1
    bittihuduga
    Registered Users Posts: 1,889 ✭✭✭


    hi
    i had a mbna credit card in 2009 which was closed in 2010 june.
    i had a card protection payment(CPP) made from this card when it was active.
    i did not know the automatic renewal was mentioned in the cpp documents.
    after the closure of my credit card i did not know that i had to inform cpp.

    in april 2011, cpp have taken a payment for renewal from the closed credit card.
    i was told that when a payment request is made, it reopens the closed credit card.

    is that true?

    i was not aware of this and it built up the non payment fee and late fees and fines. since i had opted for online bills from mbna, i did not check my emails.

    does anyone know if this is right to take payment from a closed card?


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    #2
    BuffyBot
    Registered Users Posts: 24,924 ✭✭✭✭BuffyBot


    Yes. If the merchant has what is called continuous authority to debit, then an incoming charge from them will reactivate an account until you cancel your agreement with them.


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    #3
    unclebill98
    Registered Users Posts: 3,816 ✭✭✭unclebill98


    The only way to avoid paying it is if you asked for it to be cancelled and have proof of doing so. If not your liable to pay it. Pay the bill and cancel the agreement.


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    #4
    bittihuduga
    Registered Users Posts: 1,889 ✭✭✭bittihuduga


    thanks for the confirmation.
    paid the old card. and cancelled the auto renewal


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    #5
    Jim2007
    Moderators, Business & Finance Moderators Posts: 10,281 Mod ✭✭✭✭Jim2007


    bittihuduga wrote: »
    Does anyone know if this is right to take payment from a closed card?

    You need to understand that there is a difference between cancelling a credit card and closing the account. Cancelling the credit card means that it can't be used to generate new transactions, but this does not mean that the payments will be refused on that account - if a merchant has a recurring authorization, like what you had then they will be processed. Therefore, if you do not need the account, not just the card, then you should instruct the card company to close the account, not just cancel the card.

    Jim.


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