If I'm pre-paying a service each month and I cancel my card, getting threats about collections is the exact opposite of what I expect. What I usually expect is for the service provider to either cancel my service or put it in some kind of suspended mode and then follow up with me to see if I really meant to cancel. Good billing providers would actually do this automatically: http://chargify.com/features/dunning-management/
As an aside, half the purpose of Zipcar is that it isn't a critical account. It's an easy-to-use convenience that saves you from the complexities of owning a car or making arrangements with a traditional rental service.
Monthly services fees are a convenience for both the buyer and the seller, not just the seller.
It's effectively a credit system. You owe them money at the end of the month for services rendered since the last bill.
no it's not!!!
i prefer that my credit card stays active if i'm late. I prefer that my health care is active if my payment is late. I love that my cell phone is reachable if i miss my bill.
Stop making excuses. 99.9% of the time, i don't want the merchant to cancel services if i miss a payment.
Simply stopping payment is a bullshit way to indicate you want to stop paying for a service.
This is hacker news. Thing about building a system where you had to account for people breaking a contract every time they wanted to cancel service. That's an edge case and shouldn't be encouraged.
Calling the creditors when a) the missed payment is for a pre-paid service; b) is a small amount; and c) the service hasn't been used by the customer... is completely inappropriate.
Even more inappropriate is when a merchant builds their entire business model based on a combination of infrequent auto-renewing payments, a complicated cancelation process, and crazy cancelation terms. Canceling at some gyms, for example, is more complicated and requires more effort and notice than leaving an apartment. That's sneaky (and by design).
Is it stupid to cancel your cards as a way of ending your contracts? Yes. Is it stupid to take draconian measures to get money from a customer who doesn't want and hasn't used your service? Yes.
personally, it seems like a lot of people are trying to whine their way out of contracts.
How about threatening to send it to a collections agency? Was that a great way to go too?
I work at a company that offers a subscription service. If someone failed to re-bill and we threatened to send them to collections, most of our customers would react to such a threat in one of two ways.
1. Immediately cancel their account.
2. Quickly cancel their account, but after one of our re-billing attempts had gone through, in which case they would also demand a refund (if we are lucky) or would complain to their credit card company and we'd end up with a chargeback. Enough of the later and the banks get annoyed.
We've found in fact that a lot of people who have stopped using our service forget that they are on automatic billing. We successfully charge them, and then they cancel. We give them a full refund if they cancel reasonably soon after the renewal.
For me, it's more of like magazine subscription. If you don't renew, they can just stop sending you magazines.
With apartment renting, you continue to use the service/product. If you stop paying your rent, they need to kick you out of your apartment.
If you don't renew, what is the cost for Zipcar since you can't avail of the service anyway?
I suggested that we send out an email to the subscribers offering a one-month credit if they wanted it, and the management looked at me like I was crazy. When I asked why, they explained that if we sent an email like that out, it would remind the members to cancel their subscriptions.
That was a big part of my inspiration to create the "iTunes Store for porn" application.
This author, Fred Stutzman, clearly stated he quit using the service sometime between "last year"(2008) and March of the following year, 2009.
A magazine subscription is a better analogy. If you don't renew you don't get the service.
1. Email them 3-7 days prior to an auto-renewal to tell you it will be renewed if you do nothing;
2. Simply cancel the account if an auto-renewal fails emailing the customer to tell them why. Ideally it will go inactive for a period (eg 7 days) in case it's unintentional;
3. Give a no fuss refund within 7 days of an auto-renewal if the service hasn't been used in that time; and
4. Allow easy deletion of an account (not simply inactive ie it's about data retention).
Stories like this are good to publicly shame companies for putting short term interests (the money made from auto-renewal grifting) ahead of customer satisfaction, which is ultimately to their detriment.
Still... not sure why this is on HN.
If your service is good, people will renew automatically. Given the proliferation of online services, it is absolutely impractical for people to keep track of many dozens of expiration dates.
There should be a federal law preventing this behavior. It's dishonest and a very bad practice. Zipcar should be held liable for any damage to this lad's credit. GRRR
But in the contract, you already agreed to let them charge you every month. I don't know the wording, but it probably doesn't say "as long as this card is active". This wasn't a case, if I read correctly, of automatically renewing when he hadn't agreed to that, but of him promising to pay until he cancelled his account, and then admittedly attempting to defraud zipcar by neither paying nor canceling.
There should be a federal law preventing this behavior. It's dishonest and a very bad practice.
To be clear, do you mean the practice of agreeing to charges you have no intention of paying? ;)
I agree, though, that we desperately need contract reform. Maybe contracts which are not individually executed by at least one person on each side should be advisory only, or something. What with the uncertainty surrounding TOS, EULAs, licenses, and 20 pages of fine print, they nearly are anyway, in practice.
oh and you can write a contract to do a lot of things--doesn't mean they all should be legal.
And he has approved a comment that was entered after mine.
On an unrelated note, I once had an auto-renewing contract for $2/year renew at $40. It was interesting because the $2 subscription was on a now expired credit card from one bank and the $40 subscription appeared on a different card with a different number from a different bank. The transaction was considered illegal by MasterCard.
IANAL, but aren't contracts only valid if there is consideration for both parties? If they're still letting him use their cars then the contract is probably legally binding, but if they've already cut him off then he can probably argue that the contract is invalid and he doesn't have to pay off the debt.
This was discovered the hard way by people putting down deposits for to-be-built houses, who thought they could simply walk away from the full purchase if the value of the house fell between the time they put down the deposit and the time the completion was due.
So in a simple agreement where you agree to do $10,000 worth of work for someone, and ask for a $2,000 deposit, the client is not allowed to just pay $2,000 and walk away even if you haven't done a single minute's worth of work on the project yet.
However, I think for most of us, the zipcar account isn't such a huge deal (I can always hit avis, enterprise, or get a cab if it's an emergency and I don't have friends.) I know, personally, that I'd really prefer to have my zipcar account (if I had one) terminate upon non-payment, rather than hit collections.
This is an issue I've thought a lot about; right now, my policy is to warn and then shut you off, in fact, one of the reasons I use paypal is that I can only ask you for money. I can't pull. This makes billing mistakes on my part much less of a big deal. For most of my customers, I think this is probably the right thing. But yeah, it probably would be good to allow them a choice.
But yeah, for many of us, especially for pre-paid services, the assumption is that if I stop paying you, you will just cut me off. considering how many subscriptions I have (and the difficulty of canceling some of them) I think that's quite reasonable. Hell, I periodically change my credit card number to make sure all the 'package deals' I get when I sign up for stuff I actually want from someone shady, like, say, a bank, get canceled.
Well, if you're using zipcar, it's precisely because your car is not in the same category with these others. If it were in that category, you'd just buy a car.
Think of this way: what if you could simply stop paying rent when you want to move out of an apartment? Or you just stopped paying your cell phone bill when you want to cancel it? What if you forgot to pay your health care premium and you lost your health insurance??
Clearly these aren't acceptable ways to break out of a contract.
The author's trick to "lose" your card to prevent auto billing is inviting issues like this. It seems so much smarter to just check your credit card statement each month. That would be much less work than having to update your credit card number everywhere you do want to renew a service.
Your credit card failed processing and Zipcar kept your service up and prompted you to update the card. That seems like a great way to go. If they had simply cancelled your account, I could imagine this blog post going the other way. "I forgot to update my card and zipcar cancelled my account, leaving me stranded when I really needed a car!!"
With critical accounts like your car, apartment, cell phone... it seems best to be explicit when you want to cancel your account.