Ask HN: Credit Card billing practices | Hacker News Reader

Ask HN: Credit Card billing practices

5 pointsdavismwfl3 comments

I just had an interesting experience with Brighthouse Networks, curious if this is a common practice in anyway.

We have autopay setup via a visa debit card, I had a new card issued because the bank decided to move to chip cards. I missed changing a couple of autopays immediately, including brighthouse. Not a huge deal, soon as I saw it I fixed it and never had any issues.

What is weird, is when I got the statement it showed Brighthouse tried the payment 3 times on the same day, first for the total amount due, then for 50% of the total, then for 40% of the total. In my case they were all denied because I had a new card issued with new details so it wouldn't even process. However, I got to thinking, had this been a situation where someone had a valid credit card or a debit card with just a low balance, then it technically could have created multiple overdraft (or over limit) charges at the bank. I think this is valid because two smaller payments might get "covered" with the overdraft/over limit fees, but the combined larger amount might be rejected outright. Hence two $35 or whatever overdraft fees for someone because the company decided to break the payment without first asking the consumer.

Is this a standard practice amongst companies? I have never seen it before, and while it didn't hurt me it seems to be a questionable practice. At the same time, I can partially see a benefit of a company doing this, for anyone that had a rough month it might keep their services on with the smaller payment until they get the rest of the funds together. But it just seems wrong the company does it without asking the consumer first.

Which is more likely:

1) Brighthouse has a problem with cards that decline a $100 charge, but won't decline two $50 charges.

2) Brighthouse has a problem with customers that have a $100 bill but less than $100 available on their credit/debit card.

I think the answer is the second. There's no reason for the first to occur. If a bank's fraud filter mistakenly identified a regular monthly bill as suspicious and blocked the charge, it'd probably block the followup charges from the same company too.

Then, the goal would be to collect as much of the owed money as is available on the card, not to split a payment into chunks. If the 100% charge wasn't declined, they wouldn't have attempted the 50% charge. If the 50% charge wasn't declined, they wouldn't have attempted the 40% charge. There's no possibility for multiple charges going through and creating extra overdraft fees if they do it that way.

That said, I've never seen this practice before.

Yep see your point and agree totally on which problem they face most often likely.

I did talk to customer service to get an explanation of the statement since it just looked weird. When I talked to him he did say that if the first smaller charge (50%) goes through, the system automatically tries one more charge on the same day for a lessor amount too. He stated very matter of fact it is to try and collect as much as possible of the total due. He didn't say what that amount would be though.

I guess I am somewhat conflicted because I don't necessarily see this practice as all bad, but it does seem to have the potential to cause a problem for the very people that are most at risk to having an overdraft charge. After thinking about it I think you are right and it would not cause much of a problem for a traditional credit card, but for a visa debit card is where I could see the greater risk.

I was curious too because how we setup our monthly billing for clients is if we get a denied charge we send the client an email and let them know we will retry the charge in 3 days. This gives them time to update their payment info if necessary or fix the issue before we retry. That seems more standard to me with an autopay type solution.

Never seen it as a consumer or even as an entrepreneur. We just send an email on failed payments reminding clients to update with a grace period. I know that if you use something like stripe subscriptions, they have inbuilt function to try 3 times before stopping subscriptions but again, the amount is the same for each try unless you of course build your own custom solution.

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