Hrm I've never heard of this apart from automatic billing systems ability to request the new card number. Any more specific info about that? I'm interested in how this is possible.
I know that when I canceled my American Express card, they said that they would keep the account open for an X amount of time (I wanna say ~1 year), and I would be responsible for any charges during that period, and billed normally. However that was a case of canceling because I was just closing the account - not because of fraud... I assume they have different processes.