Phantom tapes charged to cancelled credit card: How a closed credit account can come back to haunt the unwary (CORRECTED)

CORRECTION (PUBLISHED 25TH APRIL 1993) APPENDED TO THIS ARTICLE

TO BE charged for goods you never received is bad enough. But when the amount is debited to a credit card account that was closed more than a year before, the situation becomes a farce.

In December 1991, Keith Brazier spotted an advertisement in a national newspaper from a company called BookTalk, for a set of talking business book cassettes.

The cost was pounds 69.95 - 50 per cent off the regular subscription rate - plus pounds 10 postage and packing for the year. Mr Brazier ticked the box asking for the amount to be put on his credit card and sent off the order form.

He duly received all the tapes and thought that was the end of the matter.

However, in February 1993, he got a bizarre letter from BookTalk.

The letter said: 'You have only paid for the first year and that was at our 50 per cent discount introductory offer.

'You now owe us for 1992 but due to a computer error we did not bill your account. To be fair we could bill you for the full amount, but as it was our oversight you will be happy to learn that we will only bill you for 1993 - and write off 1992.'

Mr Brazier was far from happy to learn this. As far as he was concerned he had made a one-off payment in 1991.

He had not received any tapes in 1992 nor in 1993, and therefore could not see why he was being charged for anything.

On 16 February he wrote back to BookTalk at its office address in Dublin. He asked for a copy of the original order he had signed.

He sent his letter recorded delivery but received no reply.

Then, out of the blue, a cassette arrived, which he promptly sent back.

Everything went quiet until he received a credit card statement from a Royal Bank of Scotland Visa card account on 12 March.

The statement showed that on 22 February his account had been debited with pounds 149.95 in favour of BookTalk. Payment was due from him by 5 April.

Mr Brazier was flabbergasted. He had closed his RBS Visa account more than a year previously, having cut up his card and sent it back with a covering letter.

What is more, the Visa statement says quite clearly that the available credit is ' pounds 0.00'.

The situation was getting completely out of hand. On 15 March, Mr Brazier wrote to the RBS credit card centre. He reiterated that he had closed the account.

He then received two letters from RBS, both dated 28 March, from two different people in the same department.

One letter said that RBS was investigating the debit and asked him to complete a form confirming that he had not authorised it.

The other said that his account had been closed but that as the centre had received notification of a transaction on it, could he confirm whether 'we have acted in error in closing your account'.

The letter concluded: 'With your account being marked as closed there is obviously a risk that a transaction could be declined.'

But declining the transaction was exactly what Mr Brazier wanted. The situation was fast becoming ludicrous.

When we spoke to RBS, the comments of the spokesman provided little reassurance: 'Mr Brazier needs to establish what he actually signed. If he entered into a subscription agreement with the retailer, the agreement he made is binding and his card will be debited and he will be sent the bill.

'If it is a mistake then again he needs proof from the retailer,' he said.

But Mr Brazier had already asked for a copy of the order form from BookMark and had not received a reply.

In any event, surely RBS should have checked with Mr Brazier first whether payment had been authorised on an account long closed?

The RBS spokesman confirmed that alarm bells did ring on Mr Brazier's account. But it was not until after the statement had been despatched with the debit entry that letters were sent to him asking for confirmation of whether payment should be made. Which is rather like shutting the stable door after the horse has bolted.

Meanwhile, we asked some of the other banks how they dealt with closed credit card accounts. A spokesman for Barclays said: 'After three months you drop off the system. We would say: 'Sorry, no account with us,' if someone asked for a payment.'

National Westminster Bank takes closed credit card accounts off the system after six months.

A spokesman for Midland Bank said that if a request for payment was received any time after an account was closed, a customer would receive a letter before it was paid.

The banks always advise that you cancel all payments directly with the retailer when you close your credit card account. That is fine as long as you can remember which they are, or if you meticulously keep your credit card statements.

The other piece of equally impractical advice is always to keep a copy of any order form you charge to your credit card.

Meanwhile, RBS is investigating Mr Brazier's case and is awaiting a response from BookMark's bank. The RBS spokesman has warned that 'it may take some time'.

We spoke directly to BookMark last week. The application form that Mr Brazier had signed referred to an annual subscription. He thought he was signed up for 12 months, but the company apparently regarded it as an on-going commitment.

But the company has now apologised, agreeing to waive any further payments and to send Mr Brazier some complimentary tapes.

CORRECTION

ON 11 April, we reported on a customer's concerns over an order for business book cassettes placed with BookTalk. We wish to make it clear that it was not our intention to accuse BookTalk of impropriety.

We accept that its initial agreement with the customer entitled it to charge his credit card until further notice and that BookTalk did not seek payment for cassettes he did not receive. We apologise for any misunderstanding.

(Photograph omitted)