Small, recurring credit card charges and bounced check handling alert: Internet ScamBusters #180
Today we focus on two new trends you probably aren't aware of that are troubling at best -- and are considered to be scams by many:
- Small, recurring credit card charges
- Bounced check handling alert.
Let's get going with today's topics...
Small, recurring credit card charges
Have you ever noticed a small charge to a company you don't recognize on your credit card statement?
You then look at last month's statement, and find the same credit card charge. And going back, you see that charge has been there month after month after month...
The charge is often for $9.95, $14.95 or $19.95 each month. These are called small, recurring credit card charges and experts say they have increased dramatically over the past six months.
People often believe that the charge belongs to their spouse.
These charges are more than annoying. Unfortunately, they can add up to hundreds of dollars over time.
Often, these charges begin with a telemarketing call or a pop-up offer on the Internet. Sometimes the fact that there is the charge for some freebie is completely hidden in the small print -- or there is no mention of it at all.
It's often very difficult to stop the billing -- and getting a refund is frequently close to impossible.
Some of the companies that promote these products stay just on this side of the law. Others are outright scams.
As an example, one neighbor of ours told us this story about recurring credit card charges:
They recently had two of these recurring credit card charges show up on their credit card statements. One was for "credit card protection" when they opened a new credit card. Fortunately, this one was easy to cancel and they caught it the first month and got a full refund.
A second recurring credit card charge they found was much more difficult to deal with. They found this one after four months -- they both thought the other person had ordered the $9.95 service. When they called, they were told that one of them had clicked "yes," saying they wanted a travel discount plan when they visited a website. Neither of them remember ever being asked about this service.
It took four phone calls and three months (including numerous threats) to finally stop the billing, and they only succeeded in getting a partial refund.
How do you protect yourself? Check your credit card statement carefully, and call if you don't recognize a charge. Read the fine print very carefully if you fill out online surveys or agree to freebie offers online. Make sure you truly understand what you are agreeing to with any offer you accept. Finally, use a pop-up blocker to eliminate unwanted pop-up windows.
Bounced check handling alert
Imagine that you bounce a check. (Hopefully, this isn't something you do often, but it happens to almost everyone at some point over the years.)
If you do bounce a check, there's no question that you are responsible to pay what you owe. And, it's certainly reasonable that you are charged a fee to pay for your financial mismanagement.
The new trend we want to alert you to relates to the fact that prosecutors in some areas are now using "check-diversion" companies to deal with bounced checks.
Check-diversion companies are private, for-profit debt collection companies.
The concern is that some of these check-diversion companies are engaging in abusive and deceptive collection practices -- and this may get a lot worse shortly.
How does this affect you (especially if you don't bounce checks)?
Since identity theft is one of the fastest growing crimes, victims of identity theft can have bounced checks on their records -- even for bank accounts they never opened!
Congress is now considering legislation that would exempt check-diversion companies from the Fair Debt Collection Practices Act, which prohibits the use of deceptive and abusive collection practices. (This legislation has been approved in the House and is being considered by the Senate.)
Experts say that we've seen a big increase in the use of abusive and deceptive collection practices over the past couple of years. Expect increases in the area of bounced checks if this law passes.
How to protect yourself: Obviously, don't bounce checks. 😉 Balance your checkbook every month, monitor your bank accounts (safely) online, consider overdraft protection, and keep extra money in your account to cover any mistakes you might make.
Time to close for today. Wishing you a good Memorial Day weekend.