In the fight against "gray charges," or the sneaky charges that appear on people's credit card statements without them knowing how they got there, diligence and a phone call to the retailer may be the best steps for avoidance. Tara Lynn Wagner filed the following report.
Spending money is pretty black and white, right? People either buy something, or they don't. How is it then that Americans owe billions of dollars every year in what's called "gray charges?"
"This is a very common issue for consumers," says Money Magazine Senior Writer Donna Rosato. "About 35 percent of consumers who use debit and credit cards get hit with at least one grey charge a year."
So, what exactly is a gray charge? Rosato says they are sneaky items that appear on statements without people even knowing they are being charged. "An automatic renewal of a membership, a free trial that turns into a paid trial," Rosato says. "Even if you download an app, you might not realize that there's a fee associated with it, and they can be very costly."
According to a recent study conducted by Aite Group and BillGuard, gray charges, including free-to-paid, unintended subscriptions, and hidden fees, reached over $14 billion in 2012.
While all of these fees add up the kicker is that chances are people asked for it. "It's a very murky area," Rosato says. "They're not illegal. They're annoying, but you have signed up for these."
For instance, how many times have people agreed to the terms and conditions on a website without reading all that legalese? "Everyone sees that little box that pops up, and it's a really long statement, and you just click 'I agree' at the bottom," Rosato says. "Don't do that. You really need to read the fine print of anything you sign up for."
Another common culprit, ironically enough, is credit monitoring. People think they are getting a free credit score, but along the way, they agree to pay a monthly fee for monitoring services.
"That one I've almost gotten hooked by as well." Rosato says. Rosato says the average gray charge is $61. The good news is that they're often easy to correct.
First up, call the retailer, and simply ask them to remove the charge. "Just say that, 'I didn't sign up for these things, and if you don't remove it, then you're going to contact the credit card issuer,' and that's often enough to get them to back off," Rosato says.
If that doesn't work, call the credit card company or debit card issuer and start a formal dispute.
Finally, the best defense is diligence. The only way to catch these tricky charges is to go through the bill or bank statement line by line, and make sure every charge is one that was intentionally made.