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Check Your Credit Card Statement for Hidden Charges

Ylan Mui

We've written before about the importance of checking all of your bills and financial statements to make sure they're correct. Now even Uncle Sam is getting involved.

The Senate Commerce Committee yesterday sent letters to marketing firms Vertrue Inc. and Webloyalty.com seeking more information about the companies' customer billing practices. They have been accused of not clearly notifying consumers when they sign up for the firms' membership services -- and that they'll be charged about $10 per month unless they cancel the subscription.

“The economy is hurting so many families today and we need to provide them as much relief as possible," committee Chairman Sen. John D. Rockefeller IV (D-W.Va.) said in a statement. "Thousands of American consumers have been complaining about these deceptive practices and asking for answers – and rightly so.”

Here's how it works: When you make a purchase through a site such as Orbitz or Fandango, a pop-up window appears during checkout offering you a cashback incentive or other discount. All you have to do is enter your e-mail address and click yes.

Of course, the catch is in the fine print at the bottom of the screen. By entering your e-mail address, you are signing up for the companies' membership service. Your credit or debit card information is then automatically transferred, and the roughly $10 monthly charge will appear on your statement indefinitely.

Spokespeople for both companies said they have received the committee's letter and plan to cooperate with the committee. Webloyalty said it sends five to seven e-mails to consumers confirming the registration, including one with tips for canceling the service. Vertrue spokesman George Thomas said consumers receive a confirmation e-mail within 24 hours of signing up, and a second e-mail is sent before the card is billed.

“Any reasonable consumer would be fully aware of the fact that they would be charged after a trial period," Thomas said.

Both companies said they comply with federal regulations regarding disclosure. But this is not the first time so-called "negative-option marketing" firms have come under fire. The Better Business Bureau gives Webloyalty a C+ rating for "one or more serious complaints filed against the business." The BBB has logged 1,839 in the past three years, with 827 closed in the past year.

Vertrue is headquartered in Connecticut, but the only listing I could find with the BBB was based in Nebraska and had an F rating.

We wrote about the practice back in 2006. Webloyalty recently settled a class action suit against it, and the Consumer Web Watch blog has a good breakdown of its history.

A spokeswoman for the Senate Commerce Committee said it has yet to receive an official response from the firms. We'll keep you posted on any progress, but in the meantime, here's the bottom line: Check your bills.

By Ylan Mui  |  May 29, 2009; 7:00 AM ET
Categories:  Consumer News , Credit Cards , Ylan Q. Mui  
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