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How does a merchant know my new card number?

With card updaters, merchants can get current account details to keep charging you

By  |  Published: June 9, 2017

To Her Credit
To Her Credit, Sally Herigstad
Sally Herigstad is a certified public accountant and the author of "Help! I Can't Pay My Bills: Surviving a Financial Crisis" (St. Martin's Press, 2006). She writes "To Her Credit," a weekly reader Q&A column about issues involving women, credit and debt, for CreditCards.com, and also wrote for MSN Money, Interest.com and Bankrate.com, and has guested on Martha Stewart Radio and other programs.
Ask Sally a question, or read her previous answers in the To Her Credit archive

Question Dear To Her Credit,
I disputed charges on my credit card and said that I didn’t authorize this merchant to bill me in the future. To make sure they didn’t bill me again, I even got a new credit card number. I thought that would prevent them from charging me again.

Now I have another charge from this merchant on my bill. How did they get my new number? Is this right? – Shirley

Answer

Dear Shirley,
As many people have found out the hard way, getting a new credit card number does not necessarily clean the slate from recurring charges or keep merchants from billing you again. Sometimes it works – but you can’t count on it.

More often, the card networks (Visa, Mastercard, Discover and American Express) are providing the “service” of updating account numbers with vendors so they can keep on billing with your new credit card number. This is a service that merchants sign up for with the major credit card payment processing networks, and it is referred to as “account updating” or something similar.

It’s easy to see why the card networks would provide this service. It’s not collusion between the issuers and the merchants to get more money out of you. Instead, as credit card account numbers change more frequently due to security concerns, it’s a way to keep things going smoothly. In addition, most of us pay for more things with recurring charges now, from video streaming services and membership fees to even utility bills.

The banks are probably correct in assuming that we wouldn’t want our Hulu service disrupted because we forgot to notify the merchant that a credit card number had changed.

When you signed up for the merchant’s service, you authorized them to bill your credit card account. The fact that the account has a new number doesn’t change that. If the bank chooses to update the account number with the merchant, the bank can.

On the other hand, disputing the charges and telling your bank that you are no longer authorizing this merchant to bill you should have put an end to it. If you notified the bank in writing, you should be able to send a copy of your previous letter and tell the bank to reverse the charges and disallow any future ones. Send the letter by registered mail, and keep a copy.

If you contacted the bank by phone, the bank should still have records of your call. Write to the bank and detail when you canceled the service and that you want a reversal of any charges after that date.

I’m assuming you notified the merchant, as well as your credit card company, that you are canceling your service. You should always take an issue up with the merchant first, before you ask the bank to reverse the charges. If you haven’t contacted the merchant already, be sure you do so.

You shouldn’t have to actually close your credit card to stop persistent recurring charges from appearing on your credit card bill, although I have heard of that being done. A phone call to the bank should have worked, but sometimes these things take more than one try.

You’ve done the right thing by keeping an eye on charges and trying to get them reversed. A letter sent by mail should get the bank’s attention and give you the results you have the right to expect.

See related: Yes, merchants can get new card info on recurring charges

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Updated: 08-20-2017

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