Every Year Capital One Reopens My Account And XBOX Live Debits Money

Every year Erick gets a Christmas present from Capital One. They reopen the credit card he closed 4 or 5 years ago. At that point, Microsoft gets into the act and starts billing that account for XBOX Live service he canceled at about the same time.

Erick says:

A long time ago I joined xbox live. I then cancelled xbox live a bit later. Microsoft continues to bill me even though my account is cancelled and they can’t even find me in their system. I had paid off and closed my CapitalOne card about 4 or 5 years ago. Every year at Christmas, however, I get a neat present from them. See what they do is re-open my credit account then allow the xbox live payment to go through. Then I have to spend hours on the phone being bounced between customer service and collections and explaining over and over what happened. I finally get in touch with someone who knows what they’re doing. I get told “yeah that shouldn’t happen”. They reverse all the charges and tell me the account will be closed permanently now.

Next Christmas comes along. Wash…Rinse…Repeat.

Well, I was no longer at the job or address that they had on file for me this time. So I’ve been sent to collections on an unauthorized charge made against an expired card attached to a closed account.

Well excuse me, CapitalOne, for not calling to inform you that I had moved WHEN MY ACCOUNT WITH YOU SHOULDN’T EVEN BE ACTIVE!

This time I’m not messing around. I’ve sent a certified letters to their president and the attorney general’s office for their state. I’m also going to be searching out lawyers if this isn’t settled. I’m tired of this game.

Yay! Go Erick! Get ’em! You should also inform the attorney general of your own state, as they represent your interests no matter where the company is located.



Edit Your Comment

  1. Shappie says:

    So, if xbox keeps charging the same CC, shouldn’t it be gone in their system sinc ethe card has a very old exp. date?

  2. Rectilinear Propagation says:

    Why is it so hard to get something to stay canceled? Are they re-opening the account because Microsoft keeps trying to bill for the canceled X-Box Live account?

    A bill being sent to a closed account should not re-open it. In fact, if the account has been closed for years that should be a reason to open a fraud investigation.

    • Holden Caufield says I'm a phonie says:

      @Rectilinear Propagation: Agreed… Billing a closed account should result in the charge being declined, not the account being reopened.

      • kc2idf says:

        @almigi: It should, yes. However, Capital One’s terms and conditions say otherwise. I know this because I’ve read them.

    • cabjf says:

      @Rectilinear Propagation: This problem most likely stems from the fact that companies keep back-ups and history on all accounts, even closed ones. If their software doesn’t check that an account is inactive, then it will go through (as the “closed” account would still be found in the database). Systems that cause these problems were probably written under the assumption that if the account is getting charged, it must still be active and not bother checking to see if it actually is or not. At least, that’s my guess as a Software Engineer.

      • howie_in_az says:

        @cabjf: Pfft.

        if( account.isOpen() ) {
        deductMoneyFrom( account );
        } else {

        It’s not rocket science.

        • Anonymous says:

          A similar issue happened to me with Royal Bank.

          I once in a blue moon used to have a Wired Magazine subscription that I used to pay with my royalbank CC. At one point i decided to cancel the subscription, sometime after that I cancelled all my accounts with the bank (including the CC) due to their unimpressive service.

          A year later I got a call from a collections agency for a $39.99 charge or something of the sort.

          After a whole fiasco, calling various places and complaining, it turned out that the bank’s set up is done in such a fashion that even cancelled credit cards will allow a “automatic charge” to go through.

          So.. it does seem to be rocket science for at least 2 banks…

        • bwcbwc says:

          @howie_in_az: Hmmm, I wonder if I decide to close my account due to the interest rate increase, and then they automatically reopen it next Christmas, will the account be at the old interest rate or the new one?

          Just a thought.

        • brokebackwallet says:










          Might work, might not. My Java is rusty.

        • jc364 says:

          @howie_in_az: Ah, but their code is:

          if( account.isOpen() || isItChristmas() ) {
          deductMoneyFrom( account );
          } else {

    • dcarrington01 says:

      @Rectilinear Propagation: I had/have a Capital One card that I paid off and closed, even got them to send me a letter stating that the account was paid in full and canceled by customer request, then about 4 months later I received a bill for service charges for $3.55 on a closed account. WTF??

  3. Brian Trethaway says:

    its a conspiracy

  4. cabjf says:

    Sounds like Microsoft should be involved here too. My bet would be that for some reason, Microsoft’s systems are still billing for his canceled X-Box Live account. When they try to send it through, something wrong with Capital One’s system allows it to go through. Perhaps their system is supposed to enable transactions that go through after an account is closed, in case you were to use your card, cancel the next day, before the charge has gone through. Either way, I would definitely involve Microsoft in any action taken as well as Capital One.

  5. nakedscience says:

    I agree: FRAUD investigation, and sue the pants of Capitol One if you can. What a load of horse hockey! Good luck.

  6. RoswellMarten says:

    This is exactly the reason to buy xbox cards and never give Microsoft your cc or bank account number. Since you can get the cards anywhere, it’s really not much hassle, plus lots of times you can find the cards on sale.

  7. xdcx11 says:

    I had this same type of situation happen with me w/ UPS. I had setup some account with them that didn’t bill to a credit card (luckily) but instead they sent me a bill in the mail. I might have used this account once. 3 years later I started receiving bills for shipments I didn’t ship. I spent an hour on the phone convincing them I didn’t make the shipments and they cancelled the charges.

    Well a few months later again another bill. This time I point out that someone is mis-entering their account number and it is ending up billing to this account that I haven’t used in 5 years. Can you please close it to prevent it. and asked them to make sure to close the account. This stumped them – apparently this account didn’t really exist in their system in a way they could delete it – just in a way they could bill me. I spend extra time arguing that they really needed to close it, but gave up finally in frustration.

    The next time I got billed I got really insistent about getting the account removed. I was entered into the ring of customer service death. Person 1 said I needed to talk to Department 2. Department 2 said I needed to talk to Organization 3. Organization 3 said I needed to talk to Person 1. I went around this circle and the second time through I started to ask everyone to stay on the line for the next person until I was guaranteed it would be resolved.

    This all led to someone finally putting me in touch with an internal person who had to apparently dig through some system and finally close my account.

  8. TEW says:

    Does he get Xbox live service when the charge goes through? This might be a case of a call center worker might be defrauding you. The AG of your state may be very helpful and this is why I don’t buy anything on Ebay that does not have an American address.

  9. MrBlastotron says:

    Capital One’s ability to blow my mind in ways i couldn’t think of before is insane. You’d like to think the company would be able to tag the customer’s account to say that this has been a recurring problem, and if they see any fee’s go to it, they are unauthorized. This would at least leave the customer free to not have to jack with this. Anyone know if this would affect his credit in any way?

  10. shepd says:

    Send registered mail to the CEO explaining you have no account with them and should your past account be re-opened without your consent (which you explicitly have revoked) you will no longer deal with the consequences until you see a judge. Explain that attempts to collect will be met with a request that CapitalOne sue you for the money. Also remind them that because you have chosen this option, they have no recourse with collections.

    Let them know you’ll be saving this letter and their response for submission to the court should they choose to sue you. And that as any future charges with them will be in dispute, they may not report any past, present, or future disputed debts to the reporting agencies, and that should they do so, you will not only be forwarding this letter and their response to the appropriate credit agencies to dispute the item, but prosecuting them to the full extent of the law.

    Inform them that you are no longer bound by any agreements or contracts you may have made with them as you have terminated all service with them, and, as such, will exercise the right to request the dispute be handled in court rather than via arbitration should CapitalOne not resolve the matter immediately.

    Also inform them that their decision not to respond will be taken as implicit agreement to the terms you’ve laid out in the letter.

    You do this one time and then you can just ignore CapitalOne forever until either they sue you (which you will handily win, it may even be as easy as sending a copy of the letter and their response to court) or a debt collector calls (in which case, if they call a second time after being informed the bill is in dispute, you may sue them).

    I expect the CEOs complaint-reading minions will take this seriously (for real) and fix the problem rather than go to court.

    You get a lot further with paper when you’re dealing with morons. Trust me. :)

  11. calacak says:

    Not that I am shocked. They have been doing this for years.

    My first card in 1991 was a Capital One and let’s just say it took until 2003 and some strongly worded letters from my Lawyer to get it cleared up.

  12. Stephen Brooks says:

    working at kohls I see this alot. Someone will want to reopen a charge and their original information (maiden name, address, phone.) all will pop up, They will then usually yell at me because “why is this information still available when I closed my account x amount of years ago” They usually have to then call the kohls credit office, get them to wipe the info and then usually don’t get the card.

  13. sleze69 says:

    Always report a credit card you plan to cancel as lost or stolen. Get a new one. Cancel.

    • tc4b says:

      @sleze69: Wow, so could MS get prosecuted for using a stolen card? That’s phenomenal. Then someone responsible could actually be penalized, unlike most cases of corporate malfeasance.

    • coren says:

      @sleze69: Oh now that’s clever. Are there any legality issues with that – reporting a non stolen item as stolen?

    • Zain says:

      @sleze69: Great idea.

    • Thorgryn says:

      @sleze69: That’s what I was going to suggest if nobody else did. A cc number listed as stolen will not accept a charge at all. So when XBoxlive tries to charge it will come back as refused instead of trusting the Capitol 1 computer to reopen the account to apply the charge.

      • bwcbwc says:

        @Thorgryn: Of course, you might start receiving collection notices from Microsoft in that case…

      • ameyer says:

        @Thorgryn: Not exactly. My mom had a debit card stolen and a certain bank that shall not be named (rhymes with “stiff bird”) let a charge through about a week after the card was “cancelled”

    • trujunglist says:


      Awesome idea! I expect to be seeing this in a consumerist “best comments” post.

  14. Anonymous says:

    When you closed your credit card account did you ever receive a letter stating so? Most credit card companies will do this to confirm an account closed. If you never received one maybe that’s where the problem started. An X-Box gremlin got into the system.

    Quote: “Are they re-opening the account because Microsoft keeps trying to bill for the canceled X-Box Live account?”

    This is what it sounds like to me. AOL used to use this tactic, even if you closed your account (AND your credit card) they would still manage to reopen both to bill you all over again.

    Those certified letters are a good start. I would also recommend putting a Microsoft/XBox block on your credit report.

  15. scoosdad says:

    I have a Visa card from Bank of America that offers as part of the deal, the ability to generate “one time use” card numbers. Supposedly this is so that this sort of thing won’t happen.

    I often wonder if a charge comes in long after the number has expired, if BofA would just simply pass it on to my account anyway as a valid charge. If they used Capital One’s rule book, they probably would.

    • SabreDC says:

      @scoosdad: Citi does the same thing too. But with Citi, the one time use cards also have the expiration date, like a credit card. Any charge against them is rejected because the “account” is closed. Do your single use numbers have a credit card expiration date? I would imagine that a charge beyond that date would be rejected.

      I wonder if the OPs original CapOne card has an expiration date that is still valid? If he canceled the card originally in 2006 and it expired in 2010 or something, I’d imagine that this problem would likely die out after 2010 (although, that’s no excuse for Capital One’s ineptness).

      I agree with the post above, report it as lost.

    • ChicagoKev says:

      The “Virtual Account Number” (VAN) service works very well for avoiding this sort of problem, never had any problem with a charge going through after the single-use “account” expired or the limited dollar amount had expired.

      On advantage to the VAN service is that even if you tell it a number is good for 12 months and $1,200 it will still lock that number to the first merchant name which processed a charge against it — so even if their database is compromised within the 12 month time frame, any charges coming from a different merchant name are also automatically rejected.

      This feature is a hassle if you want to re-use a VAN for multiple charges on a site like Payal — with Paypal, each charge is listed like PAYPAL*RealPayee so only the first charge would be permitted.

  16. Snakeophelia says:

    Man, this is one that I REALLY want to see an update on. I can’t imagine how frustrating this must be, and now he has to deal with the collections jerks? That’s insane.

  17. Red_Eye says:

    Simple fix, change the card on the xbox live account to a store bought visa with a $1 balance. Then this will never be an issue again. Cheap insurance against headaches.

    • heybtbm says:


      The problem with that is Microsoft won’t let you remove credit cards on file. You can only add new ones. Even expired cards are still attached to the account.

      • kenboy says:

        @heybtbm: Actually, a guy at work earlier today was doing just that — he mentioned in passing that he’d finally figured out how to remove his old credit cards from Live; apparently you have to do it via the web, as opposed to with your xbox itself.

  18. Pixelantes Anonymous says:

    Bit of a problem with that Red_Eye. He doesn’t have an XBL account any more.

  19. LINIS says:

    I’m pretty sure this is an XBox issue. Most credit cards, even if they are closed, will reopen if anyone charges a fee to the account number. If you get XBox to stop billing you to that account then the card will stop reopening.

    • wardawg says:

      @LINIS: That doesn’t make sense that they would be able to reopen an account from more than a year ago to process a charge placed on the account. You would think that there would be some sort of limitation on how long they could do that.

      I can see them applying a charge to a card that was closed up to a month ago as some places take that long to post charges (i.e. hotel I stayed at last year didn’t post the charges till almost two weeks after I got home), but over 4 years later? You’d think they would have given someone else that number by now, this has huge potential for fraud written all over it.

    • SabreDC says:

      @LINIS: So, if I find a credit card in the trash that is several years old, I can take it to a store and charge to it? Cool!

      Isn’t this the type of thing that credit cards are trying to protect against?

  20. David Overstreet says:

    It took me FOUR MONTHS to cancel my Crapital One Card for this reason. There seems to be no way to have a charge NOT be authorized. One of the fee’s crapital one charged me was the MEMBERSHIP FEE which kept my account open for ANOTHER month, even though I had been trying to cancel.

  21. Michael Ortega says:

    Who ever does the billing at Microsoft for Xbox live and subscriptions suck really bad. I have canceled a Phantasy star online account through them that kept billing even after I canceled and got a confirmation number. I(my fault too) didn’t pay attention and got hit with a overdraft when I didn’t have enough to cover the CANCELED PSO XBL account, MS refunded the money that they charged but told me the overdraft wasn’t their problem. Another time I gave my cousin a 3 month prepaid xbox live card so he wouldn’t have to pay out of his checking account. he put the code in one week before his paid subscription was up and what do you know they CHARGE HIM a week after he put in his prepaid card. Another time they charge him and redact the charge the next day even though his 3 month prepaid card was only 1 month in. I love the Xbox live service but I will NEVER EVER give microsoft my credit or debit card info ever again.

  22. rellog321 says:

    Their terms do not apply if the relationship has been severed. They can write what they want, but that doesn’t make it legal….

  23. rellog321 says:

    Another lovely aspect of this is that not only is Cap One (and other cards) re-opening your account, they are allowing a fraudulent charge. I love when banks say that since you’ve “had” a previous relationship with a business, that the charge isn’t fraululent. For example, Best Buy retroactively charged me for picking up a TV that I didn’t want after I expressly was told I wouldn’t be charged. Bank of America said it wasn’t fraululent sine I charged the TV oroginally…. what a load…

  24. kvanh says:

    I lost an Amex card not too long ago. I adjusted most things to the new number but missed 2. On one the charge was rejected. On the 2nd they just gave the new number to the company (I think it was Amazon or Apple) and the charge went through to the new number.

    So reporting a card lost won’t prevent this issue. Stolen maybe, not sure if the procedure is different for that.

  25. mythago says:

    @shepd: No, sending such a letter does not give you an automatic I WIN IN COURT card, and you do not make a lawsuit go away by mailing a copy of that letter and their response to the Court.

    I absolutely agree that you need a paper trail when dealing with morons (or even when dealing with NON-morons). However, as a lawyer, I am constantly seeing people come into court thinking all they have to do is show the judge “the proof” they are right, and finding out the hard way that there are specific procedures, forms and deadlines that you have to follow instead of just handing up your letter to the judge.


  26. Boulderite says:

    Sounds like you’ve been in this situation before.

    Thanks for the info!

  27. sumgai says:

    Dear Cpt. Obvious,

    Dude, what are you waiting for??? Close your accounts and they will no longer debit squat from your accounts.

    No Brainer

    • valueofaloonie says:

      @sumgai: Wow, did you actually *read* the article, or did you just scroll down and start posting? Excellent reading comprehension.

  28. Boulderite says:

    My previous response was a reply to what shepd said. For some reason when I click on the “Click here to reply to this comment” button, it isn’t working.

  29. reidnez says:

    if Microsloth has sent his account to collections, it is probably appearing as a negative (and undeserved) entry on his credit report. We all know how difficult it can be to get credit these days–even with a pristine report and a score in the 700’s–and something like this could easily result in denial of a loan or a jacked-up interest rate. He needs to attack this from another angle: contact the 3 major credit reporting bureaus and make a preemptive strike. Once a negative item is on there, even if you can clearly prove that it’s in error, it is like pulling teeth to have it removed. His best bet is to try to get them to treat it like fraud, which it essentially is.

  30. farker says:

    And here I thought it was annoying to get an email every month from CapitalOne saying my statement is ready, whan I never use that account!

    Hope the Op gets this issue straightened out. Call your attorney general’s office, hope this gets fixed once and for all!

  31. consumerd says:

    Seems like a piss poor christmas present if you ask me. I would take them to court and have them pay for the next few Christmases in the future.

  32. kdollarsign says:

    and stand idly by as his credit gets wrecked?

  33. Sagar Manda says:

    that is one of the most absurd things ive ever heard, u better take em down

  34. Crim Law Geek says:

    Capital One tried to pull the sort of bullshit with me. They re-opened the account after I accidentally charged someone on the closed credit card. They didn’t bill me for a few months, then tried to tack on a fee. Then they said I had paid too much even though I hadn’t (the account stays open with a negative balance too). I told them if I ever received another bill from them I would call the US Postal Inspectors and have them charged with mail fraud. At the time I was working my local DA, so this was definitely not an empty threat. I haven’t received anything from them except the usual junk mail.

  35. The_IT_Crone says:

    It’s the other way around: XBL tries to process your yearly charge, which then reopens your C1 card.

    The only way I know to fix it is to make that card COMPLETELY unusable, like reporting it lost or stolen. Microsoft is infamous for not allowing people to cancel XBL.

  36. Anonymous says:

    This phenomenon takes many avtars. Recently shopping at Walmart I paid with my CC. When the statement arrived there was a $20 cash withdrawal. I disputed the cash withdrawal as I have never requested cash a the check out. I received a letter from GE money, the owners of the Wal mart card saying that I should dispute the charge with the merchant. WalMart did not deny there involvement but claimed as it was 2-3 wks later they had no way of verifying this error and declined to refund me the money. The CC Industry is the most fraudulent industry in the banking world. It is Buyer Beware. Until the Federal & State Govts. regulate and penalise them for their fraudulent practices this will continue.

  37. newfenoix says:

    Deeper problem here. For the past two decades we have heard about the “dumbing” down of America. Well, guess who works these “customer service jobs?” That’s right, those folks that BARELY managed to graduate from high school. Managers like me deal with it each and every day.

  38. Anonymous says:

    I work in a state senator’s office in California. This is EXACTLY the sort of problem we solve on a routine basis – helping constituents with problems concerning companies or state agencies. Most people don’t ever think to call their elected representatives, but those representatives are elected to help people out! Aside from other possible remedies, I’d highly recommend people make more of a habit of calling representatives when you have problems like this.

    Besides, how else are you supposed to find out if your rep is actually any good? If they blow you off (which is unlikely), you’ll know to vote against them next election, even if they’re of your party.

  39. Michael Breese says:

    On Videogame Message Boards I have heard lots of people with similar complaints. When I got my original Xbox I had to give them my credit card number to get 3 free months of Xbox Live but if I didn’t cancel before the 3 months were up they would charge my Credit Card.

    So after 2 and a half months I called to cancel it and literally had to argue with the guy on the phone for 25 minutes that I didn’t want the service and I wasn’t paying for it, he wouldn’t take no for an answer. I think his goal for him was to get me so mad I would just hang up and he would get his commission for me not having canceled my account. I eventually just asked him for his name and I told him I was going to hang up and get the Better Business Bureau involved and he then canceled it after asking me “Are you sure?” about 10 more times.

  40. mariospants says:

    I had the exact same problem with car insurance. Every single freaking year for 5 years after I had sold that particular car and cancelled the insurance on it, I received insurance papers for it along with a commensurate increase in my bill. You have to be diligent, because in my case I used automated billing and was duly deducted. Even though I was in the right, they still never reimbursed me for the first month I was billed as I had to pay for “provided insurance coverage.”

    It wasn’t until I changed insurance providers that the madness finally stopped.