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Visa Informative - Visa cuts off scamming merchants - Credit Card
Credit Card
Visa just announced that it is no longer doing business with over 100 merchants who are allegedly scamming consumers. As we have all read on this site, consumers think they are getting a free trial offer of some product (teeth whitening, dietary supplements etc) then these merchants charge the consumers credit cards, sometimes hundreds of dollars.
Here is a description from the article on how the scam works:
"consumers click on an ad for a free trial offer of supplements or a free "information kit" that will explain how to apply for government grants or use the Internet to make big money effortlessly from home. They think they're entering a credit card number to pay for shipping and handling. But in a few clicks, they've unwittingly authorized ongoing charges that can rack up fast. When consumers see their statements and try to question the charges, they are often unable to track anyone down to make them stop. Often, clicking through can result in more than one monthly charge on a card.
"The game here is to get people hooked, keep them on the hook for monthly charges as long as you can, and only stop making those charges when you're forced to," said Stephen Salter, vice president of BBB Online. BBB has received thousands of complaints about the problem, with multiple companies to blame. "The product is irrelevant to getting the charges on the card."
The trick is a marketing technique called "negative option," where customers must say they don't want to join a so-called club or receive additional materials in the future. The details of the ongoing charges are often in small print or can only be found by following a hyperlink. There's frequently a series of pre-checked boxes that most consumers zoom past as they order. Skipping those boxes is key, because leaving them checked ostensibly giving the companies permission to keep charging the card."
It is refreshing to see a major corporation take this action.
Here is a description from the article on how the scam works:
"consumers click on an ad for a free trial offer of supplements or a free "information kit" that will explain how to apply for government grants or use the Internet to make big money effortlessly from home. They think they're entering a credit card number to pay for shipping and handling. But in a few clicks, they've unwittingly authorized ongoing charges that can rack up fast. When consumers see their statements and try to question the charges, they are often unable to track anyone down to make them stop. Often, clicking through can result in more than one monthly charge on a card.
"The game here is to get people hooked, keep them on the hook for monthly charges as long as you can, and only stop making those charges when you're forced to," said Stephen Salter, vice president of BBB Online. BBB has received thousands of complaints about the problem, with multiple companies to blame. "The product is irrelevant to getting the charges on the card."
The trick is a marketing technique called "negative option," where customers must say they don't want to join a so-called club or receive additional materials in the future. The details of the ongoing charges are often in small print or can only be found by following a hyperlink. There's frequently a series of pre-checked boxes that most consumers zoom past as they order. Skipping those boxes is key, because leaving them checked ostensibly giving the companies permission to keep charging the card."
It is refreshing to see a major corporation take this action.
Comments:
Posted by Skye on 2009-12-17:
Good to know. But anytime a free site offers you something for free, and then asks you for your credit card information, red flags should go up. Also, people need to take responsibility for themselves and read the terms and conditions, and fine print before even placing an order. It's to easy to point and click to buy something, and then have buyers remorse later on, after actually reading what you just gave your credit card information to.
Posted by goduke on 2009-12-17:
"There ain't no such thing as a free lunch."
Posted by Stew on 2009-12-17:
Hooray for Visa!!!
Good info, thanks for the post.
Good info, thanks for the post.
Posted by Skye on 2009-12-17:
Amen, Hallelujah, and pass the shotgun!
Posted by Skye on 2009-12-17:
Darn, lost my edit time.
That should read, "Hallelujah"
That should read, "Hallelujah"
Posted by zzrokk on 2009-12-17:
A positive move by Visa but in a matter of months (or less) these same scammers will have figured out a new scam and company name.
Posted by Wally86 on 2009-12-17:
If a company is offering something free, then they should not need your credit card information and they shouldn’t charge you shipping because its not free if they do.
That’s how that bald headed thief has been getting away with scamming people in to buying his crappy CD's.
That’s how that bald headed thief has been getting away with scamming people in to buying his crappy CD's.
Posted by Slimjim on 2009-12-17:
Sounds like they are getting aggressive, although Visa (and the others) has always cut off any merchant who has high volume of disputed charges.
Posted by zzrokk on 2009-12-17:
More symbolism than substance?
Posted by superbowl on 2009-12-17:
Typical merchant fee's run 2% - 4%. These trial offer companies are high risk and pay a much higher fee. The processor knows the charge back rates will run higher than the 2% limit. It sounds like it has become more of a consumer protection issue that just a flat charge back problem.
Posted by GenuineNerd on 2009-12-17:
A good move for Visa. MasterCard, American Express, and Discover should take Visa's lead and block scam merchants as well.
Posted by GenuineNerd on 2009-12-17:
Also, most of these pills and other products (for weight loss, bowel cleansing, sexual performance, etc.) are a big waste of money...not only from the credit card fraud, but the products themselves aren't effective. Drugstores, supermarkets, and supercenters also sell versions of these products that you can buy without waiting for the mailman...even the vast majority of "as seen on TV" gadgets are sold locally now. CVS and Walgreens, for example, sell "bowel cleansing" products once sold only by mail or web. Libido boosters could be found alongside the condoms and lubes. And with the new year coming soon, look for sales and promotions on practically every diet pill out there...aimed at those wanting to shed those pounds they gained over the holidays (or years.) Why fall for a web or mail order scam when you could waste a little less money for pills that don't work...at the corner drugstore.
Posted by Trixta on 2009-12-17:
^^I was suprised to see Klee Irwin's colon cleanse right next to the Extenze pills at the local Walgreen's. They had Acai berry pills too, which is what a large number of the scammers are selling. Good to know the grossly overpriced placebos are now available locally.
Posted by superbowl on 2009-12-17:
Klee Irwin, now there is one freaky, greasy looking snake oil salesman. One look at him should send anyone running.
Posted by Trixta on 2009-12-18:
Not to mention the perma tan and his apparent obsession with feces.
When I first saw this guy holding forth with his theories about poop, I could not believe what I was seeing.
When I first saw this guy holding forth with his theories about poop, I could not believe what I was seeing.
Posted by Starlord on 2009-12-23:
TANSTAAFL
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