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As a merchant, I offer online subscription services to my customers. Often, my customer's credit card will expire, despite having an active subscription service to my product.

Is it legal for me to guess my customers new credit card expiry date to continue charging them for their subscription, if they haven't cancelled and their old card has simply expired?

  • Here in the US, the CVV code (a 3-digit security code printed on the card and often required for purchases where the card isn’t present) usually changes when the expiration date does. Is there not something equivalent in Australia? – Michael Seifert Sep 14 '19 at 16:26
  • @MichaelSeifert for credit cards, CVV and card number stay the same in Australia – Barney Chambers Sep 15 '19 at 6:46
  • Can you still charge their old credit card even though it's expired? There's another question where this happened to someone. law.stackexchange.com/questions/32055 – James Sep 16 '19 at 12:02
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Dale has the right answer, but I'd like to elaborate on why it isn't lawful (as compared to why it would be unlawful).

I know it doesn't work that way on line, but it's simpler to think of a credit card as a physical piece of plastic. The bank will have issued this to their customer. It will have a number and an expiry date. You have no way of knowing whether a replacement card has been issued. Even if one has, the customer has authorised you to charge a specific card - you do not have the customer's authorisation to charge a different card with a different expiry date.

By guessing the expiry date, you would be making a representation to the bank that the customer has authorised you to charge that card (if it exists), when they have not.

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No

That would be a breach of your agreement with both your customer and your bank.

It’s also fraud.

If they don’t respond to reminders, you just have to suspend/cancel their subscription (subject to your terms with them).

  • In what way is this a breach of agreement with my customer? Could you please add some more information on why its fraud as well Thank you for your answer! – Barney Chambers Sep 13 '19 at 12:27
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    Because your customer gave you an expiry date - a date beyond which you cannot use their card. That’s the answer to both. – Dale M Sep 13 '19 at 12:47

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