Many customers are discovering how difficult it can get to cancel automated charges that they had requested on their credit cards or bank accounts. One of the key reasons for this is that the customers do not know the exact rules for executing the cancellations. These rules can also vary from bank to bank and can also be different for credit cards and bank accounts. A large number of lawsuits have been filed by customers against this practice and in December 2005, America Online, a unit of Time Warner Inc agreed to pay $25 million arising out of customer law suits.
Since last year, automated bill payments have surpassed other forms of payments in the US and the trend indicates that this is set to grow. Banks and credit card companies are working to enhance the scope of payments to include big ticket items like rentals and lease renewals.
Banks have squarely blamed customers for the issue and say that the customers’ inability to follow appropriate rules is leading to the problem. Meanwhile, Visa and MasterCard have stated that they have strengthened their systems to enable automated payment cancellations to happen smoothly.
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