The process is not really in the consumer's best interests.
Until now, the only real issue that we faced was the problem of expiring credit cards. Credit cards generally expire every two years (sometimes more frequently), primarily due to the fact that this is the life expectancy of the magnetic strip on the back of the card. When a customer’s credit card expired, they needed to provide us with the updated card details, otherwise when we tried to charge their card, we would receive a ‘card expired’ error back from DPS. Clearly this somewhat limits the convenience factor for our customers, in fact many customers told us so, pointing out that their card number hadn’t changed.
The solution, as it turns out, is a little known feature called the recurring billing flag. Essentially when a payment is sent through to the bank with the recurring billing flag set, they will (generally) ignore the expiry date when processing the transaction.
Dairyxox: Its not hard for unscrupulous business' to guess the new expiry date. As the post above alludes to, it is updated every 2 years for nearly everyone.
nova: I had the same issue with Consumer subscriptions. My main complaint was they auto-renewed six weeks before the previous subscription was due to expire. I wasn't expecting this to happen so far in advance. After noticing the charge, I did some digging, and discovered they had sent an email which had ended up in my spam folder.
Six years ago I found that ANZ had actually processed a direct debit around 6 weeks after I had cancelled the credit card. I got back from holiday 4 months later to find letters from them threatening to cancel my credit card if I didn't pay! When I rang them, they said that even though it was already cancelled, they didn't have too much control over the merchants, and that their normal process was to contact the merchant to request them to stop. Seemed very bizarre to me. They didn't charge any penalties or account fees.
Certain types of merchants can do something called a "hard" charge. This basically forces the transaction no matter what the state of the card is, and no matter what the card limits are. A merchant with the ability to do this can even successfully charge $10,000 to a card with a $500 limit.
This is normally limited to merchants who provide service prior to you paying (e.g. hotels, taxis, etc).