You canceled a subscription but still got charged. It’s one of the most common credit card disputes. Here’s why charges sometimes continue after you’ve canceled a subscription and how you can dispute erroneous subscription charges.
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Canceled Recurring Charges Are the Leading Credit Card Dispute
Canceled recurring transactions, such as subscriptions, membership fees and utility bills, were the single most common reason cardholders disputed charges in 2024, making up 40% of disputes on general-purpose credit cards, according to Consumer Financial Protection Bureau data. “Services not received” were the second-most-common reason for disputes, with 21% of disputed transactions, followed by cancellations or credit not issued for nonrecurring transactions at 18%.
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Why Subscription Charges Can Persist After Cancellation
If you see a charge after you’ve canceled a subscription, it could mean the cancellation wasn’t completed, or the billing cycle allowed another charge. But merchant mistakes happen, too.
“We often see older consumers thinking they are canceling by deleting an app instead of canceling the subscription,” says Paige Wingler, vice president of consumer lending at Skyla Federal Credit Union.
Wingler says having multiple accounts can be a problem, too. For example, if you have a phone app and a computer app with the service, you’d need to cancel both to stop future charges.
The problem could be that the cancellation wasn’t complete. You may have stopped partway through the process or the account may still have an active billing authorization. If you set up your subscription through the App Store or Google Play, you likely need to cancel there instead of with the merchant.
Billing timing can cause confusion, too, says Wingler. If you cancel midcycle on a service that bills in advance, it may stop future charges but not the bill for the current period.
But even if you did everything right, the merchant could fail to process your cancellation correctly.
Save the confirmation when you cancel a subscription, such as a chat screenshot or email. It should include the date and terms of cancellation, including whether you still owe anything after you cancel, such as a prepaid month of service.
Should You Dispute a Subscription Charge?
A dispute can help with a canceled subscription charge if you canceled before the next renewal, were charged anyway, and the merchant won’t refund it.
But you shouldn’t dispute the charge if you canceled after the subscription renewed, or the charge covered a billing period that had already started. If you didn’t fully complete the cancellation, the charge could be valid.
“A dispute is appropriate when the consumer properly canceled, but the merchant continued billing or refused to correct an unauthorized charge,” says Felix Shipkevich, special professor of law at Hofstra University. “These types of claims often fail when there is no proof of cancellation, the request was made after the renewal date, or the consumer continued using the service after supposedly canceling it.”
Credit card issuers often require that you contact the merchant for a resolution before filing a dispute. Before you take the dispute to your credit card company:
— Contact the merchant, ask to confirm the cancellation and request a refund.
— Save the merchant’s response, or document proof that you received no response.
— Gather your cancellation confirmation and the statement showing the disputed charge.
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Contact the merchant right away to get a refund for charges made in error. If you don’t get anywhere with the merchant, dispute the error with your credit card company as soon as possible. To protect your federal billing-error rights, you must send a written notice to the credit card company within 60 days of receiving the statement with the disputed charge. You can file a dispute even if you’ve already paid the bill.
What to Do if a Dispute Doesn’t Fix the Problem
Your dispute may be denied if you can’t prove that you canceled the subscription, or if the charge was for a valid billing period. If your dispute is denied, review the issuer’s explanation and compare it with your cancellation records. You may be able to reopen the dispute with additional documentation that shows the charge was in error.
If another charge appears, contact the merchant to confirm the cancellation and submit another dispute if necessary. Shipkevich says you can ask the issuer to block future payments from the merchant. You can also send a final written notice to the merchant revoking authorization for any additional charges.
Changing your credit card number may not stop the charges, says Lee Hall, founder of Brookside Payments. “A stored card credential can rebill against a reissued card automatically through an account updater, so a new card number alone won’t always stop it. The reliable stop is having the issuing bank block that specific merchant.”
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Canceled Subscriptions Are Driving Credit Card Disputes originally appeared on usnews.com
