Most consumers are unaware of the term “negative option” and it’s relation to credit card charges. While you might not recognize the technical name of this marketing practice, you more than likely have seen it in action. For many years consumers have been complaining about unauthorized charges to their account from merchants for products or services they haven’t ordered. It appears we are now getting support from an unlikely source. Visa has vowed to help protect card holders by closely monitoring merchants with a high number of disputed charges. This is a refreshing piece of news as credit card companies have not been viewed in the most positive light in recent months.
Twenty-nine percent of American consumers have at one time or another been the victim of negative option marketing practices. When a consumer accepts an offer for a free trial or sample of a product they are often unwittingly agreeing to a subscription or further purchases which will be charged to their credit card. If a merchant does not clearly disclose the fact that future charges will result from the “free” offer unless the consumer cancels their subscription or membership, they are using deceptive marketing practices. In most cases the consumer finds out too late once they see charges on their account they did not authorize and it is often difficult to receive a credit for these charges through the merchant. The only recourse is to turn to the credit card issuer and dispute the charges. This is where Visa plays a role in reducing unauthorized charges.
Visa acknowledges these practices occur and they currently monitor their payment network in search of merchants who have an abnormally high number of disputed charges. This is the first sign that a merchant is not on the up and up. Once spotted, Visa contacts the merchant instructing them to take action to reduce the level of disputed charges. If the merchant does not comply they will lose the Visa acceptance privilege.
Removing merchants that use misleading if not fraudulent advertising from the network of merchants allowed to accept Visa is one way Visa account holders will be protected. The following tips can help all consumers avoid unauthorized charges and how to fix them should they occur.
* Pre-checked boxes- Look for pre-checked boxes when you are signing up for a free offer or trial service. In many cases of negative option marketing, the box authorizing further charges is already checked and you have to “uncheck” the box to prevent future charges.
* Read the fine print- Make sure you read the fine print and any terms and conditions before agreeing to receive an offer. Most merchants disclose the fact they will be charging your account, however that information is often buried beneath a lot of other information. You have to read any available information to ensure you are not authorizing charges to your card.
* Review your bill- Many people take for granted the fact that the only charges on their bill will be for items they purchased. It is imperative you review each statement every month. Otherwise you could be paying for unauthorized charges without even knowing they are there. Should you find any unauthorized charges, contact the merchant first to try to settle the issue. If you have no success going that route, take the matter up with your credit card issuer. Never allow unauthorized charges to go undisputed.
The best way to avoid unauthorized changes on your credit card is by paying close attention to who has access to the information. Few things in life are truly free, therefore sometimes it is just better to avoid these offers in the first place. If you are required to enter credit card information to get something for free, you can bet you will be charged for something somewhere down the line.