Is this legal? Microsoft comitting credit card fraud?

[toythatkills]

I just got an email to say that my payment to renew my Live had been accepted and my Live renewal date is now April 2nd 2009, I then got another email to remind me that my credit card had expired and to change it.

I've now got no idea if I've been charged but it's definately looking that way, surely if I have that's not legal, is it? They've clearly charged a credit card I haven't given them permission to charge.

[Concrete donkey]

I just got an email to say that my payment to renew my Live had been accepted and my Live renewal date is now April 2nd 2009, I then got another email to remind me that my credit card had expired and to change it.

I've now got no idea if I've been charged but it's definately looking that way, surely if I have that's not legal, is it? They've clearly charged a credit card I haven't given them permission to charge.

If you used your credit card for the first 12 months it's treated as a subscription I think. It's done all the time which is why I only pay via prepaid cards.

[toythatkills]

Ah right. It baffles me that they can charge a card that doesn't exist, though.

I did plan to start using pre-paid cards when my Live expired, I was unaware that it never would while Microsoft can charge when they like

[fallenangle]

I'd guess that somewhere hidden in the small print when you signed up it would have said you're giving them enduring power to debit your credit card anually unless the subscription was cancelled. Many magazines and clubs use this sort of system which is essentially direct debit but using a CC.

The Live renewal notice will have been generated automatically and the CC details update reminder too. Whether this means your subscription renewal was accepted will depend entirely on when they actually presented the renewal ie. before or after the CC expiry date.
If it was after you must assume that it wasn't - it certainly should not have been presented let alone accepted if this was the case.

I would suspect that if the renewal had been rejected you would hear from LIve pretty fast warning you that your subscription was about to lapse and what you needed to do. They don't want to lose customer.

The important thing to do is go to LIve and update your CC details immediately. You're going to have to do that anyway unless you want to change the payment method.

[anephric]

Apparently it's common practice in the industry to charge against cards even when the expiry date has passed, and often the payments get processed. It happens a lot to people with MS and Live and I know for a fact, when I worked in rental, we'd process fees against cards that had expired and get payments.

[toythatkills]

I've phoned them and demanded a refund, and they say that they've only attempted to charge the card so it may not go through anyway, but if it does I'll get a refund. Seems weird that they'd renew my account based on the possibility of payment being received, but whatever...

I guess we'll see whether I get my money back!

[fallenangle]

Apparently it's common practice in the industry to charge againast cards even when the expiry date has passed, and often the payments get processed. It happens a lot to people with MS and Live and I know for a fact, when I worked in rental, we'd process fees against cards that had expired and get payments.

That is bad, really bad. It means that anybody who got hold of a just expired card might still be able to use it. It also exposes the lie that the 3 digit pin number on the back improves security as that changes for every new card whether a renewal or replacement. Expired cards shouldn't be usuable by anyone.

Thank the stars I've always snipped my old cards into little bits before disposal.

[Dirty Sanchez]

The interface used to process Credit Card payments has many many options. Each has a specific use and recommended settings.

The most basic of these is just the CC number required.

The more involved transactions check start/end date, 6 digit pin (even though you only use 3, AMEX uses 4, capability of 6). A further level is available that will also check the cards registered address to the shipping address.

The retailer takes the risk if the card is a fraud. As MS have very little to lose if you use an expired card (ie they just switch off your Live access) it looks like they have gone for the cheapest option.

[12-51-00]

If the payment isn't returned and does go through what will have happened is they've seeked authorization before your card expired and then claimed the money later. It's quite common, as a bank has to pay authorized payments no matter when the actual payment is processed.

Edit: If it doesn't go through, then they've just processed the payment without getting the authorization first. Probably because they've already done it for previous payments and it's now a rolling subscription.

Very few outlets actually process payments at point of sale, what happens is they get an authorization which verifies the balance on your card is enough to cover the payment then process it later.

[fallenangle]

But that's the point, it wasn't him using the expired card it was MS trying to and apparently suceeding in using it. The credit card company not blocking a transaction on an expired card is the real issue here. They're the ones at fault.

[Dirty Sanchez]

You can't say they are at fault, as I've already posted above there are many means of taking payments. The agreement with MS is the issue, it is your responsibility to cancel in the event your CC has expired.

[12-51-00]

If it is anyone's fault, it's his own for not updating his card details or checking if the take payment is on a rolling/subscription based system, which it would have said in the terms and conditions when he signed up...

[toythatkills]

I didn't update my details because that would involve giving them a valid card to debit (you can't remove old cards), I didn't want my Live to auto-renew so I just left it, assuming that they wouldn't try to debit an expired card and I'd change to a silver membership. I didn't realise that that wouldn't stop them, though.

[anephric]

It is a completely bull**** system, and I don't know how anyone can defend MS's procedures. If a card's expired, you automatically, as an average consumer, expect that it can't be used. It's not your responsibility, in any reasonable way, to have to keep tabs on expired cards. The fact that MS won't let you remove CC details without an extensive call to customer service speaks volumes.

[MJ]

The best thing about 360 Live compared to the Xbox years is you don't have to have a credit card on file, but it's a pain if you do.

I don't know any online retailers I've used that process payments when a card has expired.