How closely do you examine your recurring bills? Do you even look at the itemized charges? Even if you’ve opted for the ease and breeze of online billing and paperless statements, don't forget to take a few minutes each month to examine the fine print. Or at least read it. Otherwise, you could be washing away hundreds — possibly thousands — of dollars a year in bogus and disputable charges.
Next time you receive any of these bills either in the mail or in your Inbox, be on the lookout for unnecessary or, in some cases, false charges.
Landline and cellphone bills: Watch out for cramming
At the beginning of the year, the Better Business Bureau issued a warning about a widespread phone “cramming” scam that involved missed calls from overseas unknown callers who “ring and run.” If you pick up the call or try calling back, you usually hear nothing or a strange noise on the other end – and then the scammer deceptively bills you on your next statement. The BBB says “victims are subsequently billed not only for the incoming international call if they answer, but also the unwanted “premium service,” which typically appears as a $19.95 charge. In some cases, crammers may only put a small charge of several dollars, so as not to arouse suspicion.”
According to the Federal Trade Commission, cramming is “the practice of placing unauthorized, misleading or deceptive charges on your phone bill. Crammers rely on confusing telephone bills in an attempt to trick consumers into paying for services they did not authorize or receive, or that cost more than the consumer was led to believe.” Some 20 million people become cramming victims annually, says the FTC, but only 5% are aware.
Nationwide, cramming of landline bills accounts for about $2 billion each year, according to a Senate report and while there are no cost figures specifically for cell phone cramming, lawmakers say wireless cramming is on the rise with multiple lawsuit settlements involving AT&T Mobility, Sprint, T-Mobile, and Verizon Wireless in recent years.
Cramming was a bigger problem back when everyone had landlines, but mobile phone users are seeing mysterious charges too. According to news reports, in the last couple of years regulators have found that hundreds of thousands of mobile phone users have been charged for text services — horoscopes, sports news, flirting tips — they didn’t authorize.
Other cramming red flags include unfamiliar or suspicious terms such as “membership,” “service fee,” or “calling plan.” Also be on the lookout for charges that offer no explanation of services, such as “monthly fee” or “minimum usage fee.”
For relentless “ring and run” calls on your cellphone, you may be able to block the number using a built-in option, or simply call your phone provider to block it for you. And if you spot a cramming charge, do two things: Ask your phone carrier to eliminate the charge, and continue to keep a close eye on your next bill. You can also file a complaint with the FTC.
Credit and debit card statements: Watch out for grey charges
Get this: A recent study found that one in three cardholders is a victim of so-called grey charges. A gray charge is one that’s deceptive or stems from a confusing sale or billing tactic from a retailer or bank. In all, there were some $14 billion in grey charges in 2012. For about one-third of affected consumers, these charges ranged between $100 and $500.
The most prevalent grey charge is “free to paid” billing, which is when a free trial membership or subscription service switches to a permanent. While the terms may have been stated in fine print, the charge may still come as a surprise.
One example of a free-to-paid service is Amazon Prime, which gives shoppers access to faster shipping and streaming videos. It starts out as a 30-day free trial, but then turns into a $79-a-year membership. If you only intended to try it for free, better notify the company. You can cancel at any time.
To rectify a grey charge on your credit card, notify the merchant and ask for an explanation. Let them know you want the charge removed and to close any accounts you have open with them. If they don’t budge, notify your credit card company either online or via phone and ask them to investigate. In the meantime, the charge should be taken off of your statement. You have 60 days from the date of the bill to question the charge. Once you file, the credit card company has up to 90 days to come back with some kind of resolution.
Medical bills: Watch out for bloated fees and false claims
Researchers at the Medical Billing Advocates of America found that four out of five hospital and medical provider bills contain mistakes. Errors can be typos in billing codes that can lead to incorrect charges. Other mistakes can be sneaky and intentional like unbundled billing codes, which result in overstated fees charging you for every single procedure (as opposed to a bundled discount rate).
Another false claim to watch out for is an exaggerated number of hours spent during a procedure or stay. “A bill might charge for four hours of operating room time when the surgery only took 90 minutes. At an average of $60 to $200 charged to the patient per minute, finding a time error such as this can help tremendously,” according to Medical Billing Advocates.
Farnoosh Torabi is a financial expert dedicated to helping Americans live richer, fuller lives. Sign up for her newsletter and receive the first chapter of her latest book, Psych Yourself Rich, for free. Follow her on Twitter.