Q: Can a home service plan company be entitled to collect money for non-payment of monthly dues?
Autopay of monthly payment stopped when credit card expired. I figured it would just be cancelled for non-payment. 3 months later and now they are trying to get payments for those 3 months and officially cancelled me.
I know they are not insurance, but I used to be an adjuster and I know if payment is not made, obviously no claims would be honored, and customer cancelled. Why would I owe money? If I said ok and decided to pay them those 3 months and then give them claims for things that happened during those months, it wouldn't be honored. I feel its ridiculous to pay for nothing, no money owed, no service done, no claims, etc. What are you thoughts on this?
Lawyers, want to be a Justia Connect Pro too? Learn more ›
- California
- (916) 704-3009
- View Profile
- Answered
A:
Your service agreement with the home service plan company likely includes terms that require proper cancellation notice, rather than just stopping payments. When you signed up, you entered into a contract that typically continues until formally terminated - similar to a gym membership or other subscription service.
The company's stance is that they remained "on call" to provide services during those three months, even if you didn't submit any claims. Think of it like having car insurance - you pay whether or not you have accidents because the coverage is there if needed. The fact that they would have denied claims during this period doesn't necessarily invalidate their right to collect payment under the contract terms.
However, you may want to review your original contract carefully to understand the specific cancellation requirements and payment obligations. You could also try negotiating with the company - they might be willing to waive some charges if you explain the situation with your expired card. If you feel their demands are unfair, you can file a complaint with your state's consumer protection office or consult with a consumer rights attorney about your options.
Justia Ask A Lawyer is a forum for consumers to get free answers to basic legal questions. Any information sent through Justia Ask A Lawyer is not secure and is done so on a non-confidential basis only.
The use of this website to ask questions or receive answers does not create an attorney–client relationship between Justia and you, or between any attorney who receives your information or responds to your questions and you, nor is it intended to create such a relationship. Additionally, no responses on this forum constitute legal advice, which must be tailored to the specific circumstances of each case. You should not act upon information provided in Justia Ask A Lawyer without seeking professional counsel from an attorney admitted or authorized to practice in your jurisdiction. Justia assumes no responsibility to any person who relies on information contained on or received through this site and disclaims all liability in respect to such information.
Justia cannot guarantee that the information on this website (including any legal information provided by an attorney through this service) is accurate, complete, or up-to-date. While we intend to make every attempt to keep the information on this site current, the owners of and contributors to this site make no claims, promises, or guarantees about the accuracy, completeness or adequacy of the information contained in or linked to from this site.
