Small, recurring credit card charges and bounced check handling alert: Internet ScamBusters #180
The #1 Publication on Internet Fraud
By Audri and Jim Lanford
Copyright © Audri and Jim Lanford
All rights reserved.
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.
First though, why don’t you check out some of the most popular articles from our
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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
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
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
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.