Is it legal to provide an online service to an individual for an
ongoing (monthly) fee, and then cancel that service but continue
charging them, if you state as part of the contract that they are
responsible for cancelling their billing if you cancel their service?

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Clarification of Question by webmonkey84-ga on 13 Feb 2005 00:20 PST

It's an ongoing, automatic debit (paypal or credit card) that has to
be manually cancelled by the user, even if their access to the service
is terminated, which I think falls into the first category you
described.  It sounds questionable to me as well, but has long been
posted in large print in the subscription area of one of the more
popular online communities, and I would have assumed that if it was
not legal, it would have been challenged or removed by now.

If you are actually invoicing them or debiting them then it reeks of fraud to me.

If you are just accepting payments (that you do not solicit) then you
could blame it on their incompetence.

Either way it is not exactly honorable behaviour

you can probably challenge it through a credit card company if you charged it.

I had the misfortune of learning that credit card companies will
continue to honor very old cards even if you never update the
expiration dates.

One widely TV advertised web hosting service and web name provider has
kept billing me for sites I no longer use - it isn't possible to
remove my old credit card number from their site, I had never
authorized ongoing automatic billing and had specifically opted out of
that once - and they mail out bills which say you won't be charged
unless you reply or have authorized ongoing billing.

Despite being a very major online presence, this company stinks of
fraud and a major credit card company agreed with me after I
challenged the bill and the hosting service failed to even respond.
They obviously didn't want anyone making a stink.

I won't name them, but they are among the highest-price name services
which advertise, about 3X more than the company I actually use for my
many URLs.

Just my two bits.

No legally you cannot charge them if you cancel the service. Becuse
then you are commiting fraud as you no longer offer the service for
which they have signed up for. Think of it in terms such as this you
rent a car "not buy or lease" with your credit card then you take back
the car. You do not have to tell them to quite charging you no matter
what the agreement states. Once the car company is no longer with you
on the specific service of renting you that car then they cannot
charge you any further. And there is a such thing as illegal
contracts.

Siliconsamurai, As long as they have the service up and running that
you use or used then they can continue to charge you untill such times
as you cancel. But if you were signed up for something like yahoo
personals and were a paying member, if they were to close down then no
matter what a contract says the can not charge you for the services.
As they cannot legally render the services to you then they would be
commiting fraud.

A Example of what buissnes fraud can get in terms of fines.

$500,000 to a first-degree felony, subject to a fine of up to $25,000
and up to 20 years in jail. For stealing between $100,000 and
$500,000, violators would be committing a second-degree felony,
subject to a fine of $25,000 and up to 10 years in jail. If the theft
is between $2,000 and $100,000, violators would continue to face a
third-degree felony with a fine of $15,000 and up to 7 years
imprisonment.