Virgin Money (MBNA) Paid Someone After I cancelled my Card

TheChasman

We paid off and cancelled my Virgin Credit card in January 2010.

In January 2012 I received a letter saying my account had been reactivated because of a recurring payment of £79.99

The statement says:
ID Protection 08448 xxxxxx (I've removed the number to avoid hassles)

I rang the number to find it's some Identity theft thing I no longer want but the 14 day cooling off period for the policy had already expired before the letter even arrived so I can't get my money back.

My questions are these:

1) Why does MBNA continue to honour transactions on cancelled cards? If I closed my bank account they wouldn't do this.

2) Why isn't it possible to electronically notify the beneficiaries when the card is cancelled? I think it is but they can't be bothered.

3) Why didn't MBNA simply say it's a cancelled card so the ID Protection people could contact me directly?

Ultimately I ended up over £90 out of pocket as a result of this... I'm not happy.

[Deleted User]

Answers are below.

TheChasman wrote: »

My questions are these:

1) Why does MBNA continue to honour transactions on cancelled cards? If I closed my bank account they wouldn't do this.
because you have authorised the transaction on an ongoing basis, so it's not fair on the company not to get paid

2) Why isn't it possible to electronically notify the beneficiaries when the card is cancelled? I think it is but they can't be bothered.
this is what the cardholder is supposed to do, as they are the one who has provided payment details to the merchant. However, it seems the cardholder often can't be bothered.

3) Why didn't MBNA simply say it's a cancelled card so the ID Protection people could contact me directly? because it was your responsibility to tell those you owe or are going to owe money to how you intend to pay them

Ultimately I ended up over £90 out of pocket as a result of this... I'm not happy.

The best advice is to avoid continuous payment authorities wherever possible.

TheChasman

Interestingly they didn't give us a list of the CPAs in force on the account when we closed it.

I think this should be a legal obligation.

noh

TheChasman wrote: »

Interestingly they didn't give us a list of the CPAs in force on the account when we closed it.

I think this should be a legal obligation.

That's because they (the credit card company) have no idea who you have given CPAs to.
It's the company you are paying who you give the CPA to not the credit card company.

chattychappy

The whole credit card system is a network of cooperating banks.

You give authority for payments to be taken. You have to cancel (or attempt to cancel) with the merchants concerned.

If transactions still happen, then you can dispute them.

Simply cancelling the card makes no difference. Transactions in the pipeline, or transactions relating to authorities you have given will still go through.

Ben8282

This account was cancelled 2 years ago in Jan 2010. No payment appears to have been applied for or taken in Jan 2011. It is now Jan 2012. In all probability the original card has now expired so the expiry date on record will be invalid. Also, irrespective of any authority given for payments to be taken, the transaction on a 2 year closed account should never have been authorised as there should have been no available credit for it to be authorised against. This is not a transaction 'in the pipeline' but a debit on a two year closed account.

chattychappy

Ben8282 wrote: »

This account was cancelled 2 years ago in Jan 2010.

The OP asked them to close the account. Termination would be governed by the T+Cs which would no doubt make it clear that cardholder's obligations don't stop at that point.

Ben8282 wrote: »

No payment appears to have been applied for or taken in Jan 2011.

Fine.

Ben8282 wrote: »

It is now Jan 2012. In all probability the original card has now expired so the expiry date on record will be invalid.

The card might indeed have expired. But that doesn't cancel an authority to charge the associated account.

Ben8282 wrote: »

the transaction on a 2 year closed account should never have been authorised as there should have been no available credit for it to be authorised against.

Available credit or not, the transaction was authorised. I don't have an overdraft - but if I write a cheque I can't blame my bank if they choose to clear it (and make me overdrawn) rather than bouncing it.

Ben8282 wrote: »

This is not a transaction 'in the pipeline' but a debit on a two year closed account.

Perhaps not in the pipeline, but I did use "or" in:

chattychappy wrote: »

Transactions in the pipeline, or transactions relating to authorities you have given will still go through.

It seems the OP just neglected to cancel this plan. True, perhaps, too late first time around. But why not cancel it after that?

meer53

Might not be an annual payment, it could be every 2 years. Companies like CPP offer different lengths of contract.

chattychappy

I think the issue here is not really one for the CCs. Afterall, even without the authority the plan could still renew creating a liability to pay.

I think the issue is to what extent it is fair to have a contract which auto-renews after a long period of time without getting reconfirmation (or at least notifying) the customer. But even if this is addressed in the UK, different countries might take a different view. CCs are global and just a means of collecting the money.

dealer_wins

If the card has been closed by the customer, no further transactions should take place on it. Surely the bank is in the wrong here.

chattychappy

dealer_wins wrote: »

If the card has been closed by the customer, no further transactions should take place on it. Surely the bank is in the wrong here.

No. The T+Cs govern how an account is closed. They permit it - and that's what you agree to when you open an account.