According to experts, American consumers are being charged more than $14 billion per year on card purchases they may not want or even be aware of.
In a study conducted by the personal finance security service BillGuard, it was shown a typical cardholder paid as much as $350 last year on charges they didn’t authorize.
These so-called “grey charges” often take the form of hidden fees, automated renewals or increases in service charges.
Grey charges walk that fine line between sneaky tactics and outright fraud.
In order to avoid charges of fraudulent practices, some companies will bury hidden charges in the fine print of contracts or will require a cardholder to opt out of an offer or be charged.
While not strictly illegal, these tactics are not good business and should not be tolerated.
Here are some types of grey charges and how you can avoid them.
1. Free…not free
Some of those free offers you sign up for online have a catch to them. At first the product or service may be free, but it soon transitions into a payment.
2. Unknown or unwanted subscriptions
Even some department stores are guilty of grey charges in some of their transactions.
A few years ago, a large electronics store chain was accused of foisting unwanted subscriptions onto their customers at checkout without their knowledge or consent.
3. Negative option marketing
If you shop online a lot, especially for software or other services, chances are you have encountered a page on checkout that offered other services.
The problem here is you have to uncheck a box (or boxes) during the process in order to opt out of the offer.
“Watch out if you are asked to
supply a credit card for a free offer.”
4. Automated renewals
Some of the subscriptions you sign up for use an auto-renewal process to charge your card again. The problem with some of these is they often don’t tell you when the renewal period begins, so charges may be moved forward.
In some cases, annual auto-renewals occurred after nine or 10 months of a subscription.
5. Costs creeping up
This happens when you subscribe to a service that initially costs one amount, but the subsequent monthly charges creep higher.
This practice is not illegal if they publish the payment scheme, but many times it is buried in the fine print of their offer.
Avoiding grey charges:
The best way to avoid being victimized by grey charges is to pay attention to your monthly billing statements.
Companies depend on us being too busy to notice a few dollars here and there on our bills, so they believe they can take advantage of inattention.
Remaining aware and diligent is the only way to spot this problem.
If you discover you have been charged for something you didn’t want or choose, contact the company and ask for a full and complete refund.
If they refuse or don’t take action immediately, report the matter to the Consumer Protection Bureau or other governing body. Stay aware and alert out there, everyone!