Posted On: Wednesday - June 30th 2021 4:51PM MST
In Topics:   Economics  Big-Biz Stupidity  Scams
(Continued from previous post.)
It's not so easy to find out information on the operation of this Visa Account Updater system, but I'm almost positive it's run by Visa itself. When doing searches on this subject most of the results are pages on credit union sites with information for their customers. I really wonder how many Americans know about this system other than those who've already had to deal with it based on some problems like ours. Americans are pretty savvy consumers - well, when it's our OWN MONEY - and "we" consume a whole lot. I think word on this will get around.
BTW, I assume by "Visa" they mean this applies to MasterCard, or are there even MasterCards at all anymore? American Express has its own deal called Card Refresher that does the same thing. There is one difference I see right away with it, which I'll get to later on.
Here's how this thing must have started: Americans use the hell out of these credit cards. Additionally, as I wrote about last time, many merchants with products for sale like to arrange recurring payments. This way, Americans can more easily live paycheck-to-paycheck which, unfortunately, seems to be the preference for most, and there's that almighty convenience factor* too. Then, as noted last post and in the comments there too, there's the huge amount of scamming going on, resulting in credit cards and debit cards being canceled more often. That has been happening in our household lots lately, perhaps averaging 3 times yearly lately.** I used to go with a debit card that simply wore out.
I'm sure lots of Americans with all those recurring payments have lots of instances of either canceled service or late payments due to the company on the other end not able to get their money regularly. Then there's a complaint or a call to beg for or demand satisfaction from the CC company. I put the blame mostly on these customers, with, of course, the contributing factor of getting into these situations due to the incessant scamming.
When a charge is disputed by a customer, the way it goes, it's usually the CC company that decides to cancel, or at least strongly recommends canceling of, the card number. When the scamming is more regular, urgent, or annoying, there's one good option for the customer to stop the theft of his money - cancel the card, prontomundo. Not all the scamming is blatant There may be a disagreement resulting in an unsatisfactory conversation with "customer care". One can try to hash it out, or one can just hang up and cancel the card to JUST END IT. That is the leverage we had and thought we still have.
Therefore, there was motivation for all three parties here. For the consumers, it's having lives too complicated to keep the card numbers all up with all their creditors, getting burned by fees or lost service. The motivation for the card-issuing companies is that they have had to deal with complaints from consumers about the late fees and interactions with, and complaints from, the merchants about charges they can't collect. The merchants had a big motivation for this too, as they had to deal with lots of missing payments monthly, some to be recouped later and with late fees added, and some they had to eat. The impetus to set up this Visa Account Updater could have come from any of the 3 or a combination thereof.
They got this thing up and running. Who knew? Seriously, who has heard about it? You think you cut off the flow of the money to that alleged auto warranty service, but, whoa, next month, there it goes again!
The good for a consumer that has come from the Visa Account Updater service is that, after another unsettled dispute, or another scam is settled with the solution being another card cancellation, he doesn't have to update all his merchants or servicers(?) right away or get charged extra fees. The card issuer saves on the time dealing with complaints from both sides. The merchant or company providing a service comes out the best . Now he doesn't have to deal with complaints on said late charges (well, maybe they are actually a "profit center") and can be more confident in those receivables coming in every month. What if he's not on the up-and-up? He comes out ahead too! Win/win/win/win?
The bad aspect for the consumer is simple. His main leverage, "I'll cancel the card", is now gone. The bad news for the CC issuers is ... hmmm... nothing. Big Biz usually comes out pretty well for itself. However, I'm not completely sure about that, as they may end up with more work in the charging disputes departments. How's it going to be when many a customer can't end the money drain from some outfit, legit or not, and must call continually for months to "claw back" (as they say) the money? One Philadelphia lady tells her experience here that involves getting
The merchants have to love this new system. An example would be the Uber driver and/or Uber itself, as mentioned in the postscript of the previous post. Lastly, oh, yeah, those scammers have got to love it.
Back to our particular story now, yes, as the customer, you can opt out. That's what I did after getting the scoop, and the first thing I'd ever heard about, the Visa Account Updater. The American Express site linked to above says you need to apply to opt IN. I like that better. Maybe my wife did, without knowing anything about it, but then she applied for this card at least 5 years ago. I don't think this deal was around then, simply because one's payments WOULD be cut off to a customer if the card were canceled.
I realize that the Peak Stupidity readers are going to be on the savvier side of this consumer stuff, but I'll put my "advice to consumers" here anyway:
1) Don't set up any more monthly automatic recurring payments than you have to.
(2) If you ignore (1), decide if it's easier for you to continually make the effort to keep current CC numbers available to all those people charging you legitimately as you keep your leverage to cut the scammers off or easier for you to just fight all those charges, but not have to worry about the legitimate payments getting made.
3) Gold, Bitchez!
* It does take a dollar each month for each of the regular bills, unless I trust the outfit enough to pay ahead. Stamps are in the neighborhood of 50¢ and checks cost about 50¢. apiece. (I do know you can make up your own checks, or at least used to be able to. So far, that's not worth the effort.)
** One of these instances was an exact $150 one-time charge from that Venmo outfit. First of all, I don't usually make payments on round numbers like that, and then I didn't recognize that lame-ass internet-style name. Sure enough, people had been scammed to use Venmo before, per the bank, and the dispute was quickly settle for me. I noted that this charge was incurred one day after I stayed at a •Indian-run motel. Coincidence? I'd be generous to think that.