AA taking payment from Credit Card without Authority

[stegly]

Not sure I'm posting this in the right place, so apologies in advance if I'm in the wrong place.
Four years ago a friend was living with his parents and took out breakdown cover with the AA and paid for this using his credit card. Shortly afterwards he moved in with his girlfriend and at the end of the period of cover with the AA, he took out cover with the RAC which was cheaper. Jumping forward three and a half years, whilst taking out a business loan, his attention was drawn to a default registered against him relating to the credit card he had paid the AA with, but had not actually used for approximately three years. It would appear that 12 months after he initially took out the AA cover, the AA automatically renewed his cover and debited his credit card. He had registered his change of address with everybody that needed to know, or so he thought, but as his credit card had a nil balance & he wasn't planning on using it again he didn't tell that particular company nor the AA as he subsequently went with the RAC. Post from these two companies was probably sent to his parents house, but he had advised them that it would probably be only junk mail which they would get for him so they could 'bin' anything that arrived. He has now been in contact with the credit card company and paid the outstanding balance on the account, including all the fees & interest etc. but is obviously not happy that the AA could just take money without being told to. Is there anything he can do to claim the money back from the AA? Surely if you take out 12 months cover the onus should be on the AA to verify that you want to renew rather than being on the customer to tell them that they don't want to renew. Any advise would be appreciated.

[fiveyearplan]

A very similar thing happened to me with the RAC. I paid one year up front and the following year they took out another year's payment. I'm not sure how to go about it since you don't have the credit card any more, but you could put the payment in dispute however since it was so long ago not sure how successful you'd be. Mine was paid be debit card which is worse because the bank didn't automatically pay me, I had to go to RAC and tell them I didn't ask for cover and they illegally took money from my account.

Good luck.

[Helford]

Hi,

Playing 'Devil's Advocate', it would appear that the AA Membership was set up on a continuing credit card authority and they would have sent the renewal notice to the last address on file, the parent's home. You say, the parent's were told to bin any mail as junk as nothing of note was expected and it looks like this would have been the fate of said renewal notice!

H

[MrCollio]

I would complain to the AA. Try and get them to give the money back on the card.
Then if no joy do a joint complaint to the financial ombudsman and the insurance ombudsman.
I know of an occassion where this worked and the AA refunded the money and HSBC refunded the charges.
However this was direct debit and not continuous authority from a credit card.

[stegly]

Not sure the 'continuous authority' applies here as the contract is for a fixed 12 month period and if he were to renew following this initial period a new contract would be required. He was certainly not aware that he had given any authority for future use of his card. Also, am I right in thinking that PCI rules require that the credit card data is only held long enough to complete the immediate transaction and must not be stored unless specifically authorised by the card holder?