Credit Cards

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Question:

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Ken,

    I just saw on my credit card statement that I am getting charged a “PCI Non-Compliance” Fee.  Do I need to get a separate credit card authorization form for my monthly service contracts or is the language in your contract enough?  Why am I getting charged this fee?

JD

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Answer:

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    I asked Tom Aronica of PCI to answer this one.  Here is his response:

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Ken –

    JD is getting charged that fee because he has not met the compliance requirements set forth by the Payment Card Industry Data Security Council that are mandatory now as of July 1 (that I've mentioned a bunch of times).  Individual authorizations for recurring billing really has nothing to do with PCI Compliance.  That fee is an easy way for the processing company to make an extra few dollars by not helping their customers comply with the new data security standard (PCI DSS).    If they haven’t already done so, it’s important to make sure you submit your compliance paperwork to the security council otherwise your guys are going to be subject to big fines.  They can give me a call at 800-617-9980 if they need any help getting started.

    As for the getting recurring authorizations, that’s totally not necessary.  Your contracts are more than enough to show the card associations that it’s a legitimate transaction and you are authorized to charge the recurring billing.   PCI Professionals’ recurring billing system is only $15 a month, with no transaction fees, and once you set the billing schedule, you basically never have to worry about invoicing that customer again.   Your readers can apply on our website at http://www.pciprofessionals.com/ssip-form.html and they will receive top priority and special pricing on all of our solutions. 

Best Regards,

Tom Aronica

PCI Professionals

800-617-9980 x3201

www.pciprofessionals.com

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Comments on auto renewal

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Hi Ken,

    Thanks for the central source for state by state auto renewal provisions.  For New Mexico, your file shows the initial proposal that was being considered.  I have attached the final version that was issued on September 15, 2009.  These are the rules we function under in New Mexico.

    I appreciate the reasons for auto renewal due to the critical nature of the service we provide.  That being said, I am bothered by the tone of some of the recent postings that seem to treat the customer as our “property”.  I know that word was not used, but I think our industry often gets lazy once we have a client, and we don’t prove to our clients why they should stay with us after the initial contract period.  Having all agreements revert to month-to-month seems more than fair, as it means the client is still under contract, but it is OUR responsibility to re-earn their continued loyalty.  I have seen too many in this industry treat clients like chattel.  This is not true of everyone, but ask yourself, when is the last time you contacted your client for something other than a bill.

Dave Meurer

New Mexico

*********  Thanks - the statute has been posted at http://www.kirschenbaumesq.com/autorenewal.htm

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Ken,

    In response to Zeke Lay's recent post about my comments on auto renewals, I would like to apologize if it appeared that I was being vague about my reasoning for feeling that the industry is one that should be exempted from this type of broad brush legislation. My mistake was for taking it for granted that it be obvious.     Besides the certified and placarded systems, both fire and burg, that require systems to be monitored and/or serviced, we are experiencing more and more insurance companies calling us to verify that a client, both commercial and residential, is still under a monitoring and/or service agreement. If these companies are issuing alarm credits, I would assume they expect the homeowner and or business owner to keep these systems operational and to make sure they are being monitored. Without these in force, it may affect their policies.

    We have also experienced, through the years, that our own insurance companies are writing or rewriting our policies only after they have reviewed our monitoring, installation and service agreements for proper language. With all that said, lets take some examples of service contracts and the results of expiration.     Landscaping service contract: Should it expire without an AR clause, the grass gets taller. Pool Cleaning contract: Should that expire without an AR clause, the pool turns green. Magazine subscription: Should that expire you don't get the next month's issue. Gym membership: Your access card doesn't work. etc. etc. One the main differences is that the user of these services start to notice something is wrong right away. Why is my grass getting taller, why is my pool turning green, why can't I get into the gym. Our industry's user can go for a very long time without knowing anything is wrong until there is an incident which can be very costly either in property or loss of life. Why? Because they can keep on arming that system without knowing anything is wrong. The problem lies in that there is not a notice requirement that the contract has ended. It just ends. Monitoring is turned off and that is the end of it unless of course it is a leased system. But that doesn't even hold true when one of the majors leased their systems and never went back to claim any of them. If a company continues to monitor after the end the contract term, without an auto renewal clause in the agreement.....Well, I am not an attorney nor am I an insurance underwriter. So if I was vague about that part of my previous post, I suggest that you talk to your attorney and/or insurance carrier about the possibilities and I will leave it at that. Possibly Ken can file in the blanks about the dangers of "no contract in force" and what that can do to your business plan. In general, I don't believe these legislators understand that different services need to be addressed individually because of the affect it may have on the very people they are trying to protect. They seem to be addressing the "auto renewal clause" with a broad bush approach to auto renewals in service contracts as if they were all the same and had the same consequences should they not auto renew. They are not taking into consideration that there are two parties involved. The provider and the recipient of the service. Difference? The landscaper quits mowing the grass gets taller. The trigger is that the grass in getting taller. The recipient can either call you back sign a new agreement or go get someone cheaper. This is what the general idea is. Freedom of choice. Ok, I agree. I want that as well. I make my choice and I get my grass cut again. Why should our industry be treated differently. Our agreement expires at 11:59:59 seconds on the 31st of July. We have no AR clause in the agreement. Mr. Smith is in Europe and we didn't even know that. His quarterly billing was sent out on July 15th and due August 1st. We even put in a new agreement for him to sign. We have not heard from him to continue, he has not paid to continue, nor have we received a new agreement back.

Bob Worthy

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