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I have a Mastercard credit card issued by a U.S.-based financial institution. Several billing cycles ago the card information was compromised and several hundred transactions were initiated. The card issuer's fraud detection was able to flag all these fraudulent charges and either cancel payments or issue chargebacks. A new card was issued which I activated. However, the next billing cycle, more fraudulent charges were detected, canceled, and new cards issued. This has occurred for four billing cycles now, and four new cards issued.

The explanation I have received from the card issuer is that credit card networks like Mastercard and Visa have agreements with vendors that allow them to forward subscription charges to new credit cards when the card on file has expired. Presumably this is a benefit to customers who don't want their subscription services interrupted when their credit cards expire. The current method for dealing with these fraudulent subscription charges is to call up the credit card issuer and block these vendors one-by-one. This is time-consuming and frustrating, and a method for handling them all at once is preferred.

My question is:

Did I receive an accurate explanation for how subscription charges are forwarded on the credit card network? If this differs by network, please specify.

Secondly, is there a way to opt-out of this service? Does the card issuer have control over if subscription services are forwarded or does the credit network have exclusive control?

Peter Mortensen
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cms
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3 Answers3

47

The explanation is accurate, but not applicable to you. Note the "when the card on file has expired" part. You card hasn't expired, it's been canceled due to fraud. So your issuer, who's in fact doing the forwarding and has complete control, should have prevented this from happening. After all, the whole point of changing the card number was to prevent those who have the old card information from using it.

Mastercard/Visa, as the network owners, set the rules. They don't control your personal account.

littleadv
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This is probably pretty simple.

  1. Contact your card issuer, tell them about the problem, and say cancelling the card didn't work. Tell them that unless they prevent any charges from the previous cards from being forwarded you will change card issuer.
  2. Wait a month. If any charges are forwarded, cancel the card completely.
  3. Apply for a new card from a completely different issuer.
DJClayworth
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It actually doesn't matter what you do in regards to getting a new card from a different issuer as major vendors pay these credit card companies to forward new card info for their supposed pre-authorized payments. It's credit card companies dirty little secret. I've had Microsoft still charging whatever credit card they can find for me for a subscriptions service for 365 that never worked and that I tried to cancel numerous time and finally, after a 3 hour phone call that I eventually got through to during which I was assured it was removed and cancelled they are at it again on a completely new credit card and charged me twice within 2 days causing me to wait on hold at the credit card company to put in yet another complaint for unauthorized transaction. Absolutely terrible that these credit card companies let these large vendors like Microsoft do this.

Keith Bell
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