Legal Question in Technology Law in Vermont
Credit Card Authorization
If someone submits their credit card number and exp. date on a secure site on-line, specifying that a vendor may deduct monthly payments for a specific amount of time, does that give the vendor legal permission to do so even though there is no actual signature? If so, what makes it legally binding?
How can that information be stored by the vendor?
Also, if an expiration date expires during the monthly-payment time agreed upon, must the vendor recontact the person for their complete credit card information again - or just for the new expiration date?
1 Answer from Attorneys
Re: Credit Card Authorization
The authorization is legally binding because the cardholder has agreed to it. A signature is one type of evidence of such an agreement, but what matters is that the agreement exists and not what type of evidence is available to prove the point. This is also why sellers can enforce telephonic purchases in the absence of a signature.
The reason sellers want entirely new credit information when a card expires is that the cardholder might not renew the same card. Alternatively, he might renew it but have a new address, phone number, etc. Sellers have a reasonable interest in such changes. If the buyer doesn't want to provide this information he is usually free to pay off the entire balance instead.
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