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June 2003
Have You Noticed Unauthorized Charges on Your Credit Card?

Several weeks ago one of our staff members attempted to cancel a credit card and was told there was a $70 charge on it. She asked about the charge because she had not received prior notice on a bill. When told she was being charged for a “buyers discount club,” she immediately objected and, after some argument, successfully got the company to remove the charge so that she could close the account.
Unfortunately, this is not an unusual case. According to the Wisconsin Department of Agriculture, Trade & Consumer Protection (DATCP), many consumers have complained about similar unauthorized charges on credit cards carrying the following names: Buyers Advantage, Travelers Advantage, Shoppers Advantage, AutoVantage, and Privacy, among many others.

Misleading Sales Tactics

Consumers are confused by the sales tactics. To show how this can happen, following is a scenario described in some consumers’ complaints. First, telemarketers call, trying to interest consumers in a buyers discount club. If the consumers hesitate, they are offered a “30-day risk-free trial period” in which they are told they can decide whether or not they want to join. However, the consumers said that they did not receive marketing materials until it was too late to cancel or the materials looked like “junk mail” and they threw it out. They were then were charged anywhere from $7 to $29.95 per month on their credit card or were charged a yearly fee that averaged $70. The unhappy consumers attempted to cancel, but they were told they failed to cancel within the 30-day trial period.
These consumers explain that they did not immediately reject the solicitation because they were never asked for their credit card number; they felt they had not made a purchase over the telephone. What they did not know was that the company had already purchased their name, credit card number, and expiration date and already had the ability to charge their credit card.

Read the Fine Print

In another scenario, consumers complain they received a $2.50 or $4 check that appeared to be a thank you for staying at a Ramada, Days Inn, or Super 8 motel or for completing a satisfaction survey. When they cashed the check, they did not see the small print on the back and were suddenly enrolled in the buyers discount club.
A number of companies are being investigated by DATCP’s Consumer Protection Division. On August 7, 2002, for example, the division issued a special order against BrandDirect Marketing, Inc. of Shelton, Connecticut, for allegedly violating state consumer protection laws. The special order prohibited the company from billing a consumer without authorization and representing that the clubs are “free.” The special order also required mailing of highlighted consumer notices prior to billing so consumers can effectively cancel.

“No, Thanks”

Carefully examine your credit card bill every month. If a telemarketer solicits you for a discount buyers club, I recommend you say “no, thanks.” And, if you are one of the 1.3 million Wisconsin residents on the state’s “Do Not Call List,” you may want to contact the Division of Consumer Protection at 1-800-422-7128 to complain about a potential violation of the state law as well.


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