How to avoid hidden recurring payments
As many as 29% of U.S. consumers have claimed being duped by a growing deceptive online marketing tactics using “negative option” features.* It can occur with instances of “free trial” or “sample” marketing incentives that carry with them an agreement to be automatically billed monthly, with no further notification to the consumer.
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How do “negative option” features work?
Consumers accept an offer online, often for a “free trial” or “sample.” They provide their card information in order to pay a small amount for shipping. What they may not realize is that there is a pre-checked box at the bottom of the page in fine print or buried in the terms and conditions that authorizes future charges. Consumers are required to un-click or opt-out of a pre-checked terms and conditions or payment authorization box or cancel before the end of the trial period to avoid being billed a recurring monthly charge.
For free trials with a negative option feature, a company takes a consumer’s failure to cancel as permission to continue billing. Cancelling can also be complicated by merchants with poor customer service, slow response times, and untimely refunds.
How do I avoid recurring charges I don’t want?
Here is a checklist of actions to help protect yourself from deceptive online marketing:
- Read and understand all terms and conditions. Exercise caution when a purchase involves a free trial.
- Pay particular attention to any pre-clicked boxes before submitting payment card information for an order. Failure to un-click boxes may bind the consumer to all of those terms and conditions.
- Try to resolve the situation with the merchant. If unsuccessful, contact the card issuer immediately to dispute the charge.
- Always review card statements on a regular basis for any unauthorized charges. Notify the card issuer promptly of any unusual activity or unauthorized charges.
Also, according to the Better Business Bureau, consumers should research the business before purchasing by checking the business's Reliability Report® on the Better Business Bureau website.
How is Visa helping to solve the problem?
Visa Inc. has partnered with the U.S. Federal Trade Commission and the Better Business Bureau to educate the public about deceptive marketing practices using negative option features. Federal law protects cardholders against unauthorized purchases when they use their credit or debit cards, and Visa’s Zero Liability policy protects cardholders against fraudulent charges.**
To ensure cardholders can transact with confidence, Visa continually monitors the payment system to identify problematic merchants with excessive levels of cardholder disputes for deceptive marketing practices. Visa requires the merchant and its financial institution to take corrective actions to reduce excessive levels of consumer disputes. Merchants should make payment terms clear and conspicuous and be responsive to cancellation requests.
What action can I take if I’ve been a victim?
Consumers who believe they have been a victim of deceptive marketing and have not been able to resolve the issue directly with the merchant, should call their Visa card issuer to dispute the charge. Remember, as a Visa cardholder you are protected from fraudulent charges.**
Consumers may also report abusive practices to the Federal Trade Commission’s complaint assistance center, or their local BBB.