What to do about a fee charged for a contract that was already cancelled?

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What to do about a fee charged for a contract that was already cancelled?

I entered into a lease years ago with a credit card equipment company in order to process credit cards at my small business. Said contract was cancelled in 2007. On 02/02/11 this same company, without any notification, charged my bank account $50. After contacting my bank and then this company as to who authorized them to charge my account, they said because I entered into this contract although it was cancelled in 2007, they were still authorized to charge my bank account for a tax that they forgot to charge me for 4 years ago. Now how is this allowed to be? Anything I can do about it?

Asked on March 7, 2011 under Business Law, Pennsylvania

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 10 years ago | Contributor

If you should have paid the money--that is, if it was a legitimate charge, that you would have paid--then the company could take action to collect the money. Where they and the bank probably did something wrong is that if the contract was expired, they probably should no longer have had the authority to take money out of the account (to be sure, though, someone would have to review the contract for you). What can you do? Probably little or nothing as a practical matter, since even small claims court would not be worth it, to recover $50--after all, even small claims court has filing fees and costs. If this was a legitimate charge, console yourself that you would have paid this earlier anyway but for a mistake and just make sure you bank understands to NOT allow any more transfers.


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