Misha called her credit card provider and said that she wanted to close her account. Misha then checked her account balance and paid the full amount owing. Misha thought that her account had been successfully closed.
A couple of weeks later Misha received a statement from her provider showing that further transactions had been debited to her account and asking for payment. Misha contacted her provider who explained that these transactions were from merchants that Misha had authorised to debit her account. Misha replied that the provider should have rejected the transactions because her account was closed.
The provider referred Misha to the account terms and conditions that stated her account would not be closed until no transactions were debited to the account. The provider explained that because Misha had the relationship with the merchants, she was responsible for cancelling the direct debits she had authorised.
To resolve the complaint, the provider offered to write off the existing balance on her account, about $900, and block all the transactions from the merchants Misha had told them about.
Misha did not accept the provider’s offer and complained to FSCL.
Misha said that when she cancelled her card and paid the amount owing, she had ended her contract with the provider. The provider had no authority to keep the account open and should have dishonoured the merchant’s direct debit transactions.
To resolve the complaint Misha wanted the provider to confirm that:
- she owed nothing
- her account was closed
- she would not be liable for any future charges.
The merchant responded that they were unable to give Misha this reassurance. Although the merchant had placed a four-year block on the named merchants, it was Misha’s responsibility to contact these merchants and tell them to stop debiting her card. If, after four years, Misha had not cancelled the transactions, the provider couldn’t guarantee the transactions would not recommence, although the provider considered this would be unlikely.
We explained that when Misha opened the account she agreed to be bound by the terms and conditions, which formed the contract between her and the credit card provider. The terms and conditions stated that the account would not be closed until Misha had paid the provider all the amounts owing and that she remained liable for all charges made with the card, even if Misha had asked to cancel the card.
We considered the provider’s response to the complaint, to refund the outstanding balance and block future transactions from the merchants Misha identified, was a reasonable response to the complaint.
We did not uphold Misha’s complaint.
Insights for consumers
The terms and conditions are the contract between you and a credit card provider. Even if you think that the terms and conditions are unfair, we are likely to apply them when determining a dispute between you and your provider. In this case, only Misha could cancel the direct debit authorities that she set up, which was consistent with the terms and conditions requiring the direct debits to stop before the provider would consider the card cancelled.