Can a company cancel a contract when they proceed to take payment?

[grid]

Here is the situation:

• You sign up to a service, whether that is broadband, mobile, magazine subscription, etc, etc. You have two options, either pay a monthly subscription or pay the whole contract off in one lump sum. You choose the latter.
• The company confirms the order was successful and is placed.
• A few hours later you get another email saying they have cancelled the order because further checks were carried to do with credit checks/fraud prevention and they had to cancel.
• However after a few weeks when checking your bank statement you notice the full amount was taken from your bank account and not refunded. It was also withdrawn 3 days AFTER you were told by email that the order was cancelled.
• You contact the company to complain and state that they cannot cancel the contract now because they proceeded to take payment and you want the order fulfilled. They refuse, apologise and state you will get the money back. Eventually after 4-5 weeks from the order date it is returned to your account.

Surely this is unacceptable? Doesn't a contract involve offer and acceptance with consideration changing hands and that is binding? If they inform me the order is cancelled but days later they remove the full lump sum from my account then surely this act forms a binding contract? Why should they be allowed to simply take my money, borrow it interest free for a whole month, and then return it? That'd cost a fair whack of interest if you requested that service from a payday/short term loan provider.

Two questions:
1. What is the law on taking payment and then trying to cancel a contract?
2 What is the law on telling customer contact is cancelled, but then taking payment from them without telling them? (as in my example above.)

 

[Ziggy2024]

Here is the situation:

• You sign up to a service, whether that is broadband, mobile, magazine subscription, etc, etc. You have two options, either pay a monthly subscription or pay the whole contract off in one lump sum. You choose the latter.
• The company confirms the order was successful and is placed.
• A few hours later you get another email saying they have cancelled the order because further checks were carried to do with credit checks/fraud prevention and they had to cancel.
• However after a few weeks when checking your bank statement you notice the full amount was taken from your bank account and not refunded. It was also withdrawn 3 days AFTER you were told by email that the order was cancelled.
• You contact the company to complain and state that they cannot cancel the contract now because they proceeded to take payment and you want the order fulfilled. They refuse, apologise and state you will get the money back. Eventually after 4-5 weeks from the order date it is returned to your account.

Surely this is unacceptable? Doesn't a contract involve offer and acceptance with consideration changing hands and that is binding? If they inform me the order is cancelled but days later they remove the full lump sum from my account then surely this act forms a binding contract? Why should they be allowed to simply take my money, borrow it interest free for a whole month, and then return it? That'd cost a fair whack of interest if you requested that service from a payday/short term loan provider.

Two questions:
1. What is the law on taking payment and then trying to cancel a contract?
2 What is the law on telling customer contact is cancelled, but then taking payment from them without telling them? (as in my example above.)

It will be in their terms that the service is contingent on the due diligence they need to perform so they will have the right to refuse the contract.

Payment will have been automatic and they have returned it so no issue there. The time lag between receiving your cash back is a bit poor to be honest but other than any lost interest there is nothing you could get from then IMO.

 

[Mark T Jones]

In real terms, the simple fact is that you have nothing to go after them for - the only loss is a tiny amount of interest and some time.

I'd say move on.

 

[ctrlbrk]

Why should they be allowed to simply take my money, borrow it interest free for a whole month, and then return it?

It would be one thing if we were talking about millions of pounds, but for the modest fees that the subscriptions you mentioned usually incur, borrowing 'interest free' is not a credible criticism.

As others have said, I would chalk this up to experience and forget about it.

 

[Newchodge]

Here is the situation:

• You sign up to a service, whether that is broadband, mobile, magazine subscription, etc, etc. You have two options, either pay a monthly subscription or pay the whole contract off in one lump sum. You choose the latter.
• The company confirms the order was successful and is placed.
• A few hours later you get another email saying they have cancelled the order because further checks were carried to do with credit checks/fraud prevention and they had to cancel.
• However after a few weeks when checking your bank statement you notice the full amount was taken from your bank account and not refunded. It was also withdrawn 3 days AFTER you were told by email that the order was cancelled.
• You contact the company to complain and state that they cannot cancel the contract now because they proceeded to take payment and you want the order fulfilled. They refuse, apologise and state you will get the money back. Eventually after 4-5 weeks from the order date it is returned to your account.

Surely this is unacceptable? Doesn't a contract involve offer and acceptance with consideration changing hands and that is binding? If they inform me the order is cancelled but days later they remove the full lump sum from my account then surely this act forms a binding contract? Why should they be allowed to simply take my money, borrow it interest free for a whole month, and then return it? That'd cost a fair whack of interest if you requested that service from a payday/short term loan provider.

Two questions:
1. What is the law on taking payment and then trying to cancel a contract?
2 What is the law on telling customer contact is cancelled, but then taking payment from them without telling them? (as in my example above.)

What did the contract say about the need to verify/chek the client before accepting he contract?

 

[fisicx]

@grid, I’d be more worried about their reasons for cancelling. There is a suggestion that your creditworthiness is poor or there is something awry with your finances.

 

[Paul Carmen]

You tell us, what did the T&Cs and contract detail say, did you read it before you signed up?

 

[japancool]

Why would you even want to go ahead?

 

[grid]

It will be in their terms that the service is contingent on the due diligence they need to perform so they will have the right to refuse the contract.

.

What did the contract say about the need to verify/chek the client before accepting he contract?

You tell us, what did the T&Cs and contract detail say, did you read it before you signed up?

Yes it explains a contract is formed only when order confirmation is sent and that they have a right to refuse subject to fraud/credit checks, etc. I have a problem with refusing a contract and then taking my money regardless.

If they can assert that no contract has been created because I received an order cancellation (instead of an order confirmation) then why are they permitted to later take my money?

Nothing in their terms mentions that they may take a payment BEFORE they have accepted the order or AFTER they have refused the order.

As such, how can it be legal for a company to either:

Action the payment AFTER they have sent the customer a cancellation email, or
Action the payment BEFORE their system is willing to approve the order.

Why would you even want to go ahead?

Because I will pay many hundreds of pounds more across the next few years with anybody else.

BTW, this didn't happen once. Because they gave very vague reasons as to why order was cancelled, I thought it was my bank card at fault so I tried with another account and then again with my name matching the billing address. That's 3 orders failed. To rule myself out I even asked two relatives I live with to place an order using their details and they ALSO were cancelled. Every single time we were all charged totalling many hundreds of pounds only to discover weeks later that the money had left our accounts many days after the orders were cancelled. Maybe the address is blacklisted with them and only them?

My bigger issue isn't the money, or principle, but how they can refuse a customer WITHOUT giving a clear justification as to what the error is. I have never had a CCJ or any credit problems in the past, and this order should not require credit as it was an upfront total lump sum payment... When I made a Subject Access Request purely to understand what personal information they held about me to cancel the orders, they REFUSED to tell me. I want them to be forced to reveal their reason, yet apparently they don't have to do so under a SAR?

 

[grid]

Also I should explain, that I received an order email confirming they received the order, which I thought meant it was placed but they claim that wasn't an order confirmation as I received the cancellation email later that day.

 

[Newchodge]

Also I should explain, that I received an order email confirming they received the order, which I thought meant it was placed

Why did you think that when you knew they had said that

a contract is formed only when order confirmation is sent and that they have a right to refuse subject to fraud/credit checks, etc.

There is no contract. They took your money in error and refunded it when the error was pointed out.

BTW, this didn't happen once. Because they gave very vague reasons as to why order was cancelled, I thought it was my bank card at fault so I tried with another account and then again with my name matching the billing address. That's 3 orders failed. To rule myself out I even asked two relatives I live with to place an order using their details and they ALSO were cancelled. Every single time we were all charged totalling many hundreds of pounds only to discover weeks later that the money had left our accounts many days after the orders were cancelled. Maybe the address is blacklisted with them and only them?

That is bizarre. What kind of contract was it?

 

[Newchodge]

When I made a Subject Access Request purely to understand what personal information they held about me to cancel the orders, they REFUSED to tell me. I want them to be forced to reveal their reason, yet apparently they don't have to do so under a SAR?

They don't have to tell you why they refused your order. They do have to tell you what personal details they hold about you.

 

[japancool]

I want them to be forced to reveal their reason, yet apparently they don't have to do so under a SAR?

No, they don't. They need to tell you what personal information they hold about you, and what they do with it, not what the outcomes of decisions were. Banks reject applications all the time, and they don't have to tell you why.

 

[grid]

There is no contract. They took your money in error and refunded it when the error was pointed out.

Thanks for replying. I just don't understand how they can take the full lump sum without a contract being in place. This was no one-time glitch or error. It happened systematically on every order that was placed. There is no justification for it, no email from them to say money was taken. Also why weren't the monies automatically returned if they intend to not form a contract? It's a large well-known UK service corporation but if the law supports them, no wonder they prefer to operate this way.

They don't have to tell you why they refused your order. They do have to tell you what personal details they hold about you.

Sorry, I'm confused with what you mean. If they decide to cancel my order but not Mr Jones' or Miss Smith's, that means that they are accessing or holding unique information personal to me which causes the order to fail. These are personal details too, in that they are personal to me. Yet I do not have a right to view this from a SAR?! How else am I supposed to fix or correct their mistake?

How does Article 15 of GDPR limit a SAR to only information originally provided by the customer? Surely it should be ALL personal information related to that individual? Otherwise what's the point of it?

Does this mean that if you do wish to discriminate against someone without any valid grounds or in total error, you can freely do so because the other person cannot compel you to explain your reasons for refusing their custom? Is this correct?

Do you remember that bakery in shop in NI sued by a gay couple for refusing to produce a cake in favour of gay marriage... it went all the way to the Supreme Court before sense prevailed. The bakers even had the decency to give their sincere reasons for refusal. More fool them apparently....

Many thanks

 

[Newchodge]

Sorry, I'm confused with what you mean.

It looks abslutely clear to me. You need to talk to someone like tradiung standards over the repated taking of payment. The rest you can do nothing about.

 

[grid]

It looks abslutely clear to me. You need to talk to someone like tradiung standards over the repated taking of payment. The rest you can do nothing about.

?? Are you suggesting that personal details about me that cause my order(s) to be cancelled with them (and only them) are not personal details? It wasn't a random occurence, they have something on their system personal to me that is rejecting the order. I'm genuinely asking what do you mean? Are you suggesting they can selectively disclose only the personal data they want to and withhold other personal data? If not, could you please explain to educate me please? Thanks

 

[Newchodge]

?? Are you suggesting that personal details about me that cause my order(s) to be cancelled with them (and only them) are not personal details? It wasn't a random occurence, they have something on their system personal to me that is rejecting the order. I'm genuinely asking what do you mean? Are you suggesting they can selectively disclose only the personal data they want to and withhold other personal data? If not, could you please explain to educate me please? Thanks

They do not have to tell you why they rejected your order. They do have to tell you what personal information they hold about you. What is hard to understand about that? Perhaps this makes it clearer. They do not have to tell you which piece or pieces of your personal information caused them to reject your order, or if, indeed, any of your personal information caused them to reject your order.

They will not tell you why they rejected your order. Neither are they required to do so.

This is like pulling teeth.

 

[grid]

Except that we already know IT IS personal information that's caused the rejection because I said that their email mentions credit check/fraud/verification checks, etc....

Some unknown 3rd party credit/fraud reference agency must have given a false positive against me and told them I am a credit risk/financial fraudster/dangerous criminal/INSERT RED FLAG HERE. This is personal information they hold about me yet I'm not allowed to see this under a SAR or even know who their 3rd party source is so I can get this mess corrected?

I don't need to be told which piece or pieces of personal info are the cause, I can figure that out myself if only they bothered to PROVIDE my full personal information they hold. The point is that they won't release all my personal information in the first place...

Really what you are saying is that they don't have to release all my personal information via a Subject Access Request.

 

[fisicx]

Maybe they used a third party credit checker who rejected your application but didn’t pass on why.

Have you contacted the ombudsman for this service or the ICO or even your MP?

All we can provide here is opinions based on the limited information provided by you. You haven’t even given us the name of the provider.

 

[Newchodge]

A few hours later you get another email saying they have cancelled the order because further checks were carried to do with credit checks/fraud prevention and they had to cancel.

That is not what your first post said. That said:

Some unknown 3rd party credit/fraud reference agency must have given a false positive against me and told them I am a credit risk/financial fraudster/dangerous criminal/INSERT RED FLAG HERE.

Suppose, for example, you share a postcode with 975 people who have claimed non delivery of items known to have been delivered. Further deliveries to that psotcode may be blocked. Your postcode is your personal information. The failed deliveries are not part of your personal information.

 

[Newchodge]

I don't need to be told which piece or pieces of personal info are the cause, I can figure that out myself if only they bothered to PROVIDE my full personal information they hold. The point is that they won't release all my personal information in the first place...

You need to stop confusing your beliefs with facts. They have to tell you what personal infomration they hold about you. They have done that. Have they said they are withholding some of that information? You believe that your order was rejected because of something in your personal information (without any evidence to that effect) that they have not disclosed. Based on your guess.

 

[thetiger2015]

BTW, this didn't happen once. Because they gave very vague reasons as to why order was cancelled, I thought it was my bank card at fault so I tried with another account and then again with my name matching the billing address. That's 3 orders failed. To rule myself out I even asked two relatives I live with to place an order using their details and they ALSO were cancelled. Every single time we were all charged totalling many hundreds of pounds only to discover weeks later that the money had left our accounts many days after the orders were cancelled. Maybe the address is blacklisted with them and only them?

My bigger issue isn't the money, or principle, but how they can refuse a customer WITHOUT giving a clear justification as to what the error is.

Sorry but why would you proceed to make further transactions, if you believe they have a fault with their system?

Also, this is no different to paying for insurance on Sunday night and getting a call Monday saying the policy has been cancelled after checks. I've had that done to me recently, they took £325 and then said they'd refund me minus £25 administration costs, as the policy wouldn't cover a certain product we sold. I was miffed about the £25 to be honest but whatever, the £300 was back a week later.

I believe what's happened is, you've paid for a service on a website, the website card processor has taken payment and requested the sum from your bank. The company has checked your details and said 'No, don't want that customer' and cancelled the order. The money leaves your bank account before the cancellation request is received. They then refund credit back the other way when they process all the refunds at the end of each week. There's nothing they can do about that, it's automated. They will have a 3rd party company doing payment control.

The reasons for the cancellation can be anything. Maybe they're not taking on any new customers right now? Maybe you have a slight error in the address or name on the card, it depends on the system their end, they might get a red flag for a verification error and automatically reject any orders from certain postcodes. Sometimes it's not you, it's just their system. Same as banks, some will reject you and some won't, it's up to them.

 

[prophet01]

When I made a Subject Access Request purely to understand what personal information they held about me to cancel the orders, they REFUSED to tell me. I want them to be forced to reveal their reason, yet apparently they don't have to do so under a SAR?

@grid
As the saying goes, there are many ways to skin a cat.

If you're willing to share a copy of your submitted SAR and a copy of their response I'd be more than happy to assess their level of compliance.

The GDPR requires an organsiation's SAR response to not only provide you with copies of any personal date of yours they're processing but other information; the purpose of the processing, the categories of personal data concerned, the recipients to whom your data have been or will be disclosed etc.

This additional information might possibly open up other avenues to explore by the submission of a SAR to those other recipients of your information.

I recently used this technique to confirm my suspicions that an organisation had lied about the extent of information they held on me in relation to a false allegation made against me in February in the preformance of my professional consultancy work. Armed with this information I'm able to now consider a judicial remedy.

 

[Mark T Jones]

Except that we already know IT IS personal information that's caused the rejection because I said that their email mentions credit check/fraud/verification checks, etc....

Some unknown 3rd party credit/fraud reference agency must have given a false positive against me and told them I am a credit risk/financial fraudster/dangerous criminal/INSERT RED FLAG HERE. This is personal information they hold about me yet I'm not allowed to see this under a SAR or even know who their 3rd party source is so I can get this mess corrected?

I don't need to be told which piece or pieces of personal info are the cause, I can figure that out myself if only they bothered to PROVIDE my full personal information they hold. The point is that they won't release all my personal information in the first place...

Really what you are saying is that they don't have to release all my personal information via a Subject Access Request.

They should tell you which credit reference agency they use. That agency will provide you with the information they hold on you. That assumes it's personal information. They may just have declined you on something basic, such as how long you've been trading.

Otherwise, you need to think what you are actually hoping to achieve.

How much time/effort/money are you prepared to put in. What actual outcome are you hoping for?

 

[pentel]

What actual outcome are you hoping for?

@grid Would you have been happy if they had declined immediately and not taken any money?

 

[JEREMY HAWKE]

More to the point
I want to know what you have been up to

 

[DontAsk]

I don't need to be told which piece or pieces of personal info are the cause, I can figure that out myself if only they bothered to PROVIDE my full personal information they hold. The point is that they won't release all my personal information in the first place...

You previously said that you asked for the personal information that caused them to reject your order.

Have you just simply asked for personal information that they hold on you, without qualifying it? They must provide that. It's then up to you to determine what happened, but I doubt you will be any wiser.

 

[nelioneil]

Also I should explain, that I received an order email confirming they received the order, which I thought meant it was placed but they claim that wasn't an order confirmation as I received the cancellation email later that day.

It seems like the payment coming out is a simple oversight or error on their parts. E.g. cancellations team or people not communicating with their accounts team. No service was provided and I'm sure its in their Ts and Cs they can refuse to open accounts or fufil orders.

They are not obliged to provide a reason why even under a SAR. The same why someone may be refused a bank account or personal loan or mortgage.