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
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.
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.