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Your credit card may be giving out your data without you knowing. Here’s why

Card-issuing banks have “updater” programs in place that send your recurring transactions to a new account number when a credit card is reissued.

The updating services, provided by Visa and MasterCard, help merchants avoid having to take collection action when a card is declined. They ensure that monthly bills will be paid, even when customers forget to update the information.

With credit card updating, customers have the convenience or not paying late fees or enduring service disruptions when a transaction is rejected, said Suma Boby, a spokesperson for Capital One Canada.

MasterCard’s program is called Automatic Billing Updater (ABU). Visa Canada’s program is called Visa Account Upgrader.

“The updates are provided by the merchant’s card acquiring bank only to participating merchants and only when a consumer has already provided their account information to the merchant or enrolled in recurring payments,” said Sandra Benjamin, a spokesperson for MasterCard Canada.

Qualified merchants enrolled in the program may submit a request to receive updated account information where a merchant has an ongoing relationship with a cardholder, Visa Canada said.

“All data is transmitted and stored securely behind Visa’s firewall, and Visa and its issuers comply with privacy and all other applicable laws to protect cardholder information.”

Do you have a choice? Yes, you do – but only if you know such a practice exists.

To stop suppliers from getting updated credit card information, you can tell your bank you want to opt out and the bank will remove you. Otherwise, you will be opted in without consent.

Both Visa and MasterCard advise reading your credit card agreement and a bank’s privacy policy to see what they say. But I found nothing online when I checked to see how my own Visa and MasterCard products handled the updating issue.

All I found was promotional information aimed at merchants about the benefits of enrolling in MasterCard Automatic Billing Updater and Visa Account Upgrader.

To save time and eyestrain, I suggest calling credit card issuers to find out how to block updates to participating merchants.

Back to Rosie Schwartz, whose Sirius subscription was renewed using updated information supplied by MasterCard and Capital One.

“I was quite irate when I spoke to Sirius,” she said. “Since the subscriptions had been renewed just a few days before, they were willing to refund all my money.”

Sirius offered a lower price to stay. When she threatened to leave, she was transferred to the retention department and given a much better deal ($ 49 each for six months, including taxes).

She also received a “goodwill gesture” of $ 250 from Capital One’s privacy officer, who fielded her inquiries about the updating service.

Capital One planned to beef up disclosure, she was told. But it would not name the merchants who participated in the MasterCard Automatic Billing Updater.

“It would be a time-saving benefit if there was a list of vendors that consumers could refer to,” Schwartz said. “But as it is now, we have no idea who may have the updated information.

“I agree it may be more convenient for customers not to have interruptions in their services. But since this is a ‘pay to play’ system, it is not transparent and does not appear to protect a cardholder’s privacy. No one should be giving out my actual number but me.”

My advice: Your suppliers may be getting your updated credit card information. But you won’t find out which suppliers are paying for access and which ones are not.

To stop updated information from going to participating merchants, tell your credit card issuer you want to opt out. Get the agreement in writing.

Remember that automatic updating allows persistent marketers to keep billing you for services you don’t want any more.

If you don’t block updating, always cancel unwanted subscriptions well before the expiry date. Never assume they will stop because you have a new credit card number or expiry date.

Ellen Roseman appears in Smart Money. You can reach her at eroseman@thestar.ca.