Earlier this year, we posted a handy tip to avoid zombie billing: for a service that you plan to stop using after your contract is up, use a credit or debit card with an expiration date shortly after the end of the contract. The idea behind this plan is that an expired card can’t be billed. This didn’t work so well for Rob, whose expired credit card was zombie-billed by Microsoft for his Xbox Live subscription.

What’s zombie billing? When an account you thought was dead is suddenly re-animated, and you get charged–sometimes, thanks to auto-billing, without even realizing it.

I recently discovered a charge for $26.83 for XBox Live on my credit card for XBox Live, which I have not used in at least a year and a half, probably even more. I logged in to my XBox account to see the status of my account and I was asked to enter new credit card info since my credit card on file was expired. In fact, their website says “You have no valid payment options on file” (I attached a picture).

I called XBox Live and requested to be refunded $134.15 for the 5 charges since July 31, 2010 when the credit card they had expired. The representative I spoke with acknowledged that they were still charging my credit card even though it was expired because ‘the system’ just needs an account number to keep charging and as long as the bank accepts the charge or I call, regardless of what the expiration date is or the fact that their website says that I have no valid payment option. His supervisor restated the same thing.

I understand that I need to check my statements more regularly – this is a card which I am paying off and no longer actually use it. I’m perplexed though how XBox Live can keep charging my expired credit card even though they don’t have a valid credit card on file, thus why I asked for a refund only on my charges after 7/31/10.

I called Citi (card issuer) and spoke to a very polite representative. She issued credits for the two most recent charges and opened a dispute for the third and I have to make a written request to dispute the two oldest transactions.

A lesson learned the hard way…check your statements regularly, even on cards you don’t use/are paying off because all merchants need is your account # to keep charging it.

Wait…Rob already said what I was going to. The best way to prevent this kind of zombie billing is to check your statements, especially when an account is dormant while you’re paying off the balance.

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Take Preventive Measures To Avoid Zombie Billing

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