Legality of charging for online services not rendered Best answer on the web

Posted in: darrelrussell.com edit
07 Jan 2009
  • Is it legal to provide an online service to an individual for an
    ongoing (monthly) fee, and then cancel that service but continue
    charging them, if you state as part of the contract that they are
    responsible for cancelling their billing if you cancel their service?


  • If you are actually invoicing them or debiting them then it reeks of fraud to me.

    If you are just accepting payments (that you do not solicit) then you could blame it on their incompetence.
    Either way it is not exactly honorable behaviour


  • you can probably challenge it through a credit card company if you charged it.

    I had the misfortune of learning that credit card companies will continue to honor very old cards even if you never update the expiration dates.
    One widely TV advertised web hosting service and web name provider has kept billing me for sites I no longer use - it isn't possible to remove my old credit card number from their site, I had never authorized ongoing automatic billing and had specifically opted out of that once - and they mail out bills which say you won't be charged unless you reply or have authorized ongoing billing.
    Despite being a very major online presence, this company stinks of fraud and a major credit card company agreed with me after I challenged the bill and the hosting service failed to even respond. They obviously didn't want anyone making a stink.
    I won't name them, but they are among the highest-price name services which advertise, about 3X more than the company I actually use for my many URLs.
    Just my two bits.


  • No legally you cannot charge them if you cancel the service. Becuse then you are commiting fraud as you no longer offer the service for which they have signed up for. Think of it in terms such as this you rent a car "not buy or lease" with your credit card then you take back the car. You do not have to tell them to quite charging you no matter what the agreement states. Once the car company is no longer with you on the specific service of renting you that car then they cannot charge you any further. And there is a such thing as illegal contracts.
    Siliconsamurai, As long as they have the service up and running that you use or used then they can continue to charge you untill such times as you cancel. But if you were signed up for something like yahoo personals and were a paying member, if they were to close down then no matter what a contract says the can not charge you for the services. As they cannot legally render the services to you then they would be commiting fraud.
    A Example of what buissnes fraud can get in terms of fines.

    $500,000 to a first-degree felony, subject to a fine of up to $25,000 and up to 20 years in jail. For stealing between $100,000 and $500,000, violators would be committing a second-degree felony, subject to a fine of $25,000 and up to 10 years in jail. If the theft is between $2,000 and $100,000, violators would continue to face a third-degree felony with a fine of $15,000 and up to 7 years imprisonment.


  • It's an ongoing, automatic debit (paypal or credit card) that has to be manually cancelled by the user, even if their access to the service is terminated, which I think falls into the first category you described. It sounds questionable to me as well, but has long been posted in large print in the subscription area of one of the more popular online communities, and I would have assumed that if it was not legal, it would have been challenged or removed by now.