NBC Nightly News talked about “Grey Charges” on Saturday, July 27, 2013, where people thought they were signing up for something they thought was free and accidentally signed up for a recurring charge. The charges keep recurring on whatever credit card the consumer signed up with.
Nearly half are for services that tell consumers they are getting a “free trial,” and then later convert to a paid subscription. The tip off that it will become a recurring charge is when the free trial sign up requires a credit card number. Companies count on consumers forgetting about these charges, or missing the fine print. The remedy is to cancel the sign up as soon as you are asked for your credit card info. These charges are legal since people do willingly enter their credit card information. Hence the term, grey charges.
Some numbers they quoted:
- Consumers are paying $14.3 billion annually to Grey Charges. Or put another way, one in every three debit or credit card holders in the U.S. pays an average of $215 a year to Grey Charges.
- The most common monthly Grey Charges were between $20 and $50 last year, often from gym memberships, magazine subscriptions, and mail order programs.
An example that we avoid: people sometimes call to offer an add-on service to something we are currently paying for, such as our cable provider calling and saying, “We will give you HBO for free for the next three months.” I always respond by saying, “No thank you.” They say, “But it’s free.” I respond, “You will sign me up for a new service that I will then have to call and cancel or be charged for the continuing service, right?” They squirm a bit and say, “Well, yes, but don’t you…” I respond again, “No thank you. Do not sign me up for anything new,” and hang up. This happens a few times a year. Unfortunately, since these are companies that we have business with, they are not covered under the Do Not Call laws.
It is up to us, the consumers, to be smart and not sign up for recurring services. Pay attention to your credit card statement and stop any recurring charges that you do not want. If you do sign up for a possible recurring charge, either by accident or because you really did want to try the “free trial,” you must take the responsibility to cancel the service as soon as possible. Preferably before they can charge your credit card.
Have you ever had any grey charges on a credit card? Have you canceled them?