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Cleaning Up Those Automatic Charges

Changing credit cards provides a good opportunity to do a little housekeeping.

About a year ago, I decided to cancel my Capital One card (for reasons I discussed here at the time). As a result, services that were auto-charging that particular card had to be migrated to a new form of payment. I moved the charges to a different card before I called Capital One to cancel.

Most of these charges were monthly, but one that wasn’t slipped through the cracks: Sirius (formerly XM) radio.

I received a letter that the service would be cancelled because it could no longer be charged to the credit card information on file. I had been paying for two satellite radios, but only using one of them. So, when I called to clear up the billing problem, it seemed a good time to cancel the service for the radio I was not using.

The phone number in the Sirius letter brought me, after a few minutes on hold, to the collections department. I explained that there was nothing to collect and that I wanted to cancel service for one of my radios. No problem, the agent cheerfully told me, but cancellations are a different department from collections. She offered to transfer my call.

That put me back on hold for another few minutes. The second agent had no idea why I had called, so I explained the situation again.

Okay, the representative said, I can give you eight months of discounted service.

I emphasized that I don’t use the service, and I really did want to cancel.

She said okay once again, then offered me three months of free service.

To make sure I understood clearly, I said, “So after three months, the service will be cancelled?”

No, it turned out. At least not automatically. The service had to be active in order to receive the three months she was offering me, and could then be cancelled. I presume that to get my three months of free service, I was going to have to cough up a valid card number. (My active radio is prepaid through 2012, so I did not need to provide a replacement for the Capital One card to continue my service on that device.)

Uh-uh. There was no way I was going to provide a valid card number that would force me to go through this process again in three months. Just cancel the service, I repeated.

At this point, she asked to put me on hold. “You may hear silence on the line,” she cautioned.

I did. For more than 30 minutes.

Eventually, I put the call on speaker and went about my business. I was curious to see how long Sirius expected me to wait. I was free to hang up at any time, since there was no way for the satellite company to keep charging my now-defunct Capital One card. I was in a no-lose situation. But I can be stubborn.

The associate returned, finally, long enough to say the account had definitely been cancelled. The entire process, beginning with the call to the collections department, took just over 43 minutes.

Businesses love arrangements where they can automatically charge their customers ad infinitum. Often, the layman’s term for this is a subscription. But to a business, this can be an annuity. As in something that pays a regular stream of income, for life.

Changing credit cards is one way to coax all these annuities out of the woodwork to ensure that we still want, or even still have, the things we are paying for. One need not fire a card company the way I fired Capital One. Most will change your account number any time you ask; they do it automatically whenever a card is reported lost or stolen.

If you have a card with a lot of auto-charges, try changing the account number sometime. You might be surprised by what you learn. Just be prepared to hold the line if a subscription seller tries to wait you out.

Larry M. Elkin is the founder and president of Palisades Hudson, and is based out of Palisades Hudson’s Fort Lauderdale, Florida headquarters. He wrote several of the chapters in the firm’s recently updated book, Looking Ahead: Life, Family, Wealth and Business After 55. His contributions include Chapter 1, “Looking Ahead When Youth Is Behind Us,” and Chapter 4, “The Family Business.” Larry was also among the authors of the firm’s book The High Achiever’s Guide To Wealth.

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