Microsoft faces class-action Xbox Live lawsuit

Posted by Mike Luttrell

Microsoft is coming under fire for its questionable billing practices related to Xbox Live.

One subscriber, Ryan Graves, was so distraught by the way the company handled his subscription to the premium online service that he has filed a lawsuit and is seeking class-action status.

Graves was an Xbox Live member and signed up through the console, inputting his credit card data and allowing Microsoft to automatically bill him again the following year.

However, by the time that renewal period arrived, Graves's credit card was no longer valid, so his subscription was effectively canceled.

Later, he decided to hop back on the Xbox Live train and paid for a new one-year subscription with a different credit card. Lo and behold, he saw that his card was charged twice.

When he contacted Microsoft support, he was informed this is standard policy. What happened was when he updated his credit card information through the console, not only did he use it to sign up for a year of service at that time, but his Xbox account was automatically renewed from the last yearly subscription he paid for.

In other words, he paid for two years of service at once, because when a credit card renewal payment is declined, instead of canceling the subscription outright, your Xbox account status will continue to be viewed as an impending renewal. So if you go in and update your credit card information, it will trigger the renewal fee.

The problem here is that this information did not come up for Graves after he entered the new credit card. It was only after he paid for a separate year of service that he realized the renewal fee would be charged automatically.

There have been a lot of questionable practices with the way Microsoft handles these Xbox Live subscriptions, mostly that it is exceedingly difficult to actually cancel the service, and even some gamers who have end up being billed again anyway.

Graves claims Microsoft is violating the Electronic Funds Transfer Act, the legal measure that gives companies the authority to charge a credit card or bank account multiple times even if the consumer only provides it at the time of a single transaction. He is seeking a refund, as well as punitive damages but has not disclosed a specific amount.