Saturday, July 27, 2013

Yes, They Are Out to Get You

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Well, Amazon is hoping you will forget about the 30 days. Then they will hit your debt card for $79.00. Maybe that will kick in your overdraft protection, hitting you with another $30.00 fee causing you to pay $109.00 for a thirty day free trial. They are called “gray charges.” Last year American consumers were hit with $14.3 Billion in unwanted charges. That would be approximately one in three American card holders for an average of $215.00 per card. Gray charges are big business. The practice is not illegal but it is deceptive and unethical. Mostly these charges are generated by free trials that then turn into paid subscriptions. These companies really want to lock into your credit card or debit card with something that allows them to bleed you again and again without ever selling you anything.

The charges are usually small enough that it isn’t worth the considerable effort it will take to get your money back. The company is hoping you will not notice the charge or just let it slide. That is why it is absolutely essential that you go through your credit or debit card charges at least once a month. Just like when you balance your checkbook, make certain you can account for every charge on the statement. Credit card thieves suggest checking your card charges on a daily basis. That is a little too hardcore for me, but these experts remind us, “Just because you’re paranoid doesn’t mean they aren’t out to get you.”

Plastic money makes it all too easy for companies to engage in these questionable practices. The Consumer Financial Protection Bureau is collecting data on gray charges in a hope to encourage what they term “consumer-friendly innovation” in the financial services industry (card issuers) to flag potentially abusive charges for the card holder. I have a better idea; require 30 day free trials to end automatically unless the consumer opts in to the subscription.

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