QUESTION:
Hello Ken,
Customers are asked to include their credit Card information on your contracts which includes expiration date. What is the proper procedure to ask for updated credit card information on a longer term contract where the credit card has expired, yet the contract has not yet reached its full term?
Thanks for all the insight you have given us.
Jan Puetthoff
Owner
JP Security, Inc.
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ANSWER:
Credit card information was added to the contracts in recent updates. There was some resistance to the procedure by some company owners who do not accept credit cards, but most companies wanted the provision and not doubt utilize the information to automatically charge recurring invoices to the subscriber. Since the standard commercial contracts have an initial term of 10 years and residential 5 years it is likely that the credit card information on the contract will expire and new information will be needed.
You should handle this the same way other companies holding credit card information do, by communicating with the subscriber and letting them know that the information is dated and that you need new information. You can do this by mail, email or even by telephone. As long as you get the information from the subscriber you can continue to charge the account. Obtaining the information by written communication would establish the subscriber's continued consent to use the information.
A good method would be to permit the updated credit card information to be provided directly to your web site by the subscriber. You could alert the subscriber to go on line and provide the information electronically, or you could write the subscriber and ask that the information be provided in return mail.
Unless there is specific statutory requirements, which I am not aware of, you can use the above procedure. I would not be surprised to find out that there is some current or pending legislation, but so far I am not aware of any. If anyone knows of any, let us know.