Bamboozled October 10, 2016: If you have credit cards on file with Amazon, heed this warning

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A screen shot of an Amazon.com payment page showing expired credit cards.

 

Amazon.com is a favorite of online shoppers. You can find just about anything and have it delivered to your door.

But the credit or debit cards you have on file with the retailer may bring you an unpleasant surprise — if you don’t read the fine print.

The company can use any of the credit or debit cards you have on file to pay for auto-renewals — without asking your permission first — because you’ve already agreed to it as part of the terms of service.

It’s one of those fine print issues consumers don’t notice — until it impacts their account.

Amazon.com will send a notification to the consumer first, the company said, but we think it’s a practice worth reminding customers about.

This came to light when Consumerist.com, a favorite consumer site of Bamboozled, received an email from a reader named Laura.

According to the report, Laura went shopping locally and her debit card was declined. She was confused because she knew she had at least $100 in the account.

After a little research, she learned Amazon had renewed her $99 Prime subscription with a charge on the debit card.

Her Prime subscription was set to auto-renew, but it was supposed to happen with a different card.

The unexpected charge meant overdraft and low-balance fees from her bank, and she was out the funds she needed for her shopping trip.

She called Amazon’s customer service line.

The rep told her an alternative payment method had been used from her account, Laura told Consumerist.

Because the card that was supposed to be used for the renewal had expired, Amazon simply charged a different card listed with her account.

There’s one consumer-friendly law on the books in several states that’s not available to New Jersey consumers.

But Laura said she never gave permission for Amazon to use any other card for her subscription.

She was wrong.

Typically, if you have an auto-renewal and your card has expired, the merchant will contact you to ask for a new card.

Amazon wouldn’t speak to Laura’s case specifically, but it said it always sends a reminder with that information.

And let’s be honest. Consumers don’t always read such notifications.

And in fact, some pesky fine print found in Amazon’s terms and conditions gave Amazon permission to charge the other card.

It says (we removed the ALL CAPS used by Amazon): “Unless you notify us before a charge that you want to cancel or do not want to auto renew, you understand your Prime membership will automatically continue and you authorize us (without notice to you, unless required by applicable law) to collect the then-applicable membership fee and any taxes, using any eligible payment method we have on record for you.”

We’ve never heard anything like that before.

Consumerist asked Amazon if this policy stood for other purchases, but it said Amazon didn’t respond. So instead, Consumerist did some reading and found similar language in the terms of service for Amazon Music, Kindle Unlimited and other services.

Amazon did respond to our inquiry.

Spokeswoman Julie Law said customers have told the company they do not want their Prime service to be interrupted. That includes music, movies. TV shows, books, photo storage, shipping benefits and more.

So when it comes time to renew their membership, she said, if the card they have on file is expired, Amazon sends the customer an email notifying them that “we will use a different card that they attached to their account.”

“Customers are also notified of this when they sign up for membership,” Law said. “Of course, whenever we hear from a customer that there is an issue, we work to address it immediately.”

Here’s a new solution to help sneaky auto-renewal provisions.

You know Bamboozled isn’t a fan of auto-renewals in general.

We’ve encouraged New Jersey lawmakers to fight for legislation to protect consumers who have been stuck in auto-renewal hell, unable to get companies to cancel auto-renewals even after the consumer clearly says they’re not interested anymore.

In California and Oregon, for example, companies must clearly disclose auto-renew provisions and then get a consumer’s permission before renewing a service. If the company charges a consumer without getting consent, the service is considered an “unconditional gift” to the consumer.

Assemblyman Daniel Benson has been trying to get auto-renew legislation passed since the 2010-2011 legislative session, and while the Assembly always passed the bill — and it has this year, too — no one had sponsored a Senate version.

This year, though, consumers got a little help from Sens. Bob Smith and Linda Greenstein. In June, their Senate version received a unanimous committee vote in favor, and now we’re waiting for the bill to be scheduled for a vote before the whole Senate.

We’ll keep you posted on that.

In the meantime, you’ll have to keep close tabs on your auto-renewals. For a hand, check out this free tool Bamboozled wrote about earlier this year.

But if you’re an Amazon customer and you don’t want your Prime membership to renew on any old credit card listed with your account, you have to act.

Remove extra cards from your account so that you don’t receive an unexpected charge. If you only have one card on the account and it expires, you’ll receive a notification from Amazon to update the card.

Also, be sure to read every email you receive. That’s your responsibility as a customer.

And a side note: you’re better off using a credit card rather than a debit card so you don’t end up with overdraft charges from your bank because you weren’t prepared for an unexpected charge.

For Laura, Amazon cancelled the renewal and offered to return the $99 to her debit card, but it would take 10 days for her to receive the refund, Consumerist said. Amazon also issued a credit to cover the bank fees.

Amazon tells us that’s what it regularly does for customers in circumstances like this.

That’s great, but we’d rather see you, dear readers, avoid this from happening to you. We don’t like surprises.

Have you been Bamboozled? Reach Karin Price Mueller at Bamboozled@NJAdvanceMedia.com. Follow her on Twitter @KPMueller. Find Bamboozled on Facebook. Mueller is also the founder of NJMoneyHelp.com. Stay informed and sign up for NJMoneyHelp.com’s weekly e-newsletter.

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