Feel like you’re always investigating the case of the missing money at the end of each month? You may be among the one in four Americans who fell victim to deceptive or unwanted charges in the past year. The fact is only one in 10 of us examine every transaction on our statements, so it’s easy to overlook the evidence.
The financial sleuths at BillGuard, a secure, online tool that monitors your statements for suspicious transactions, have identified the top six types of so-called “grey charges.” While some of these fees are actually fraudulent, many are legal, unwanted charges often hidden in the fine print.
It’s likely you’ve encountered the first—and worst—offender while shopping online: those free trials that turn into paid subscriptions.
Here’s what happens: You pay $5 for a 15-day “free” trial of vitamins, thinking you’re getting a great deal. But you may not realize the clock starts ticking the minute you place your order, not when the item arrives. Right away, delivery time could cut your trial period in half. If you fail to cancel in time, you could be hit with jaw-dropping and ongoing fees for a product that was supposed to be a bargain.
Next, watch out for unwanted subscriptions that companies may sneak into your online order. As you go through the checkout process, be aware of any extra services or products that try to squeeze into your total. For instance, when ordering a piece of sports equipment, there may be a box to check to subscribe to a related magazine. But in some sneaky cases, the box is already checked, and you have to uncheck it to opt out. And it’s usually not until months later that customers realize they’ve been paying regular fees for something they didn’t want in the first place.
Negative Option Marketing
This is a deceptive trick retailers use to send you an item in addition to your order that you never wanted or just assumed was free.
For example, you buy a facial cream online, and it when it arrives, it seems the companies has also sent you a sample of lip-gloss. But the fine print explains the lip-gloss will actually become an auto-renewed shipment that you have to pay for every month. To the company, it’s just part of the transaction. For you, it’s something you have to be proactive to catch and cancel.
Unwanted Auto Renewals
When you signed up for your gym membership, your magazine subscription or your child’s soccer league, you may have inadvertently agreed to be billed yearly, quarterly or even monthly. Most legitimate merchants will make this clear when you sign up, and they should even notify you before you’re charged for the next service period—but some are not as righteous.
These are monthly charges that just keep coming back form the dead, even after you’ve canceled them.
Most people stop checking their statements a month or two after canceling a service. But zombie charges have been known to reappear on statements up to six months later. It’s best to keep an eye on your statements and, if you notice anything fishy, contact the merchant immediately.
Finally, be on the lookout for fees that just keep creeping higher and higher without notice. Watch out for monthly service charges that slowly grow. The increase may be as little as a dollar, but unchecked these small costs will add up quickly.
Tell us about your experiences with grey charges. Connect with me on Twitter @Farnoosh and use the hashtag #finfit.