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Senate To Air Findings In Web "Mystery Charge" Probe
CNet reports on hearings scheduled to open tomorrow in the US Senate on mysterious charges on thousands of consumers' credit cards. The Senate Committee on Commerce, Science and Transportation has been investigating online loyalty programs, which shoppers encounter (often with little comprehension) on the sites of online retailers such as as Continental Airlines, FTD, and Classmates.com. "At the center of the federal probe are Webloyalty, Affinion, and Vertrue, companies that make 'cash-back' and coupon offers to consumers and charge them monthly fees to enroll in their loyalty programs. ... In August, as the government's investigation rolled on, Webloyalty announced that it would alter its ads to require that consumers 'enter the last four digits of their credit or debit card to confirm' they wish to pay the membership fees. Last week, Affinion made similar changes. During the hearing, when the Senate committee is expected to make public the results of a six-month investigation, it will also likely say the alterations made by Webloyalty and Affinion don't go far enough. "
I gave some dubious site my credit card and my money mysteriously went missing.
It would alter "it's" adds?!
A law that explicitly disallows merchants to give credit card information to another party would fix this problem. If the merchant forwards you to another party, then the user must enter the credit card information again.
So you don't do online shopping of any kind? Brilliant. Enjoy paying 20% more for everything.
Of course, you could get a card which you pay off in full every month, and make sure not to sign up for suspicious looking reward programs, but that would require self-control and common sense. If you check your statements occasionally, you can note and contest suspicious charges; the time spent checking is less than the time spent fiddling with cash over the course of a month.
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A couple years ago I went to a local movie theater and the box office line was too long so I chose to buy tickets from the computer kiosk. After choosing the showtime and sliding my credit card, a screen popped up saying:
Customer Loyalty?
YES | NO
Uh, no? I thought it was asking me if I was enrolled in some discount program I had never heard about. I answered honestly (or figured that if I lied then it'd ask for an ID number I didn't have). But I could see how Web sites might ask a similar question and fool customers into buying something when they had a reasonable expectation of getting something free.
I got a mysterious charge on my credit card. I looked up the company, and the only info I could find was hundreds of people complaining about that same company, and also some theories about how they were able to get people's credit card numbers (sites they're affiliated with, etc.). They were also "uncontactable". My bank had no trouble removing the charge, but to be safe I canceled my card and had a new one issued.
[voice-of-90%-of-Britons]Because it is 'free' money and I can buy stuff I wouldn't otherwise be able to afford[/voice-of-90%-of-Britons]
I agree, it seems completely stupid. The only reason I have a credit card is for the extra protection when buying online versus a debit card, and so that any expenses I incur on company business get paid to me before I pay them to the credit card company! If you can't afford it then you can't afford it, so why make yourself pay more than is necessary for non-essential items as you rack up interest charges?
I use a virtual card. It requires me to generate a CVV2 code every time I make a new batch of purchases - the code is valid only for several hours after generating it.This makes storing it or passing to others useless. Also, I "charge" the subaccount bound to the card with the amount I want to pay, so they can't withdraw more than I consent to.
As for repeating purchases like monthly fees, either I watch for it myself, or use other methods, like bank transfer order. As a general rule, I don't allow anyone ever to withdraw money from my account without my explicit consent for every separate event of doing so.
As for daily, non-online purchases, I use a regular "flat" card, which requires the actual card for the payment, not the card number alone.
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I know a few people who work for Affinion. They are a very shady company; this isn't the first time they have been investigated. The last go around involved scamming people by sending them $5.00 checks in the mail. If you cashed the check, it would enroll you in a program that would bill you monthly. Looks like they are up to their old tricks, just updated for the internet!
Because in America, credit cards are just about the only way to build up a good credit score. Without a good credit score, you end up paying much more for big purchases (if you have to take out a mortgage for them, which is usually the case).
I would be totally fine just using my debit card all the time - except that does nothing for my credit score, which means I have to use a credit card if I ever want to do anything outrageous like buy a house.
Prepaid credit cards have limitations and you have to shop smart.
1) Most require some sort of activation fee that could be quite high.
2) Many are rejected when re-occuring, "overdraft," or secured payments are "possible."
I've been rejected when traveling and trying to use such a thing for pay as you go cell phone. The company defended saying "but what if you want more minutes?" My response was you cut me off anyhow with 0 credits by your policy and a stalemate occured.
Pre-Paids likely to be rejected when used for renting vacation vehicles like boats, scooters or bicycles. Somehow the system knows these card's aren't fully secured - the reality is you want X hours fun, the company wants X $'s of collateral.
3) Many online merchants do not process these cards correctly. I tried to buy a media CD package from a tech company, and found out that they at the time would charge me but wouldn't ship it to me because its not a full on credit card and wasn't able to be processed by their shipping dept. It was something about mismatch of verification of address. Trying to get a rollback of the charge was impossible by the bank or the company.
5) Any remaining small balance is near impossible to use or get back. Merchants weasel out saying because they are like gift cards they don't have to accept them for a purchase below a minimum. So if it has 3.75 left on the card the merchant can reject it for cause of a minimum $5 purchase (often restaurants). FInding a place and the right item that you can do cash+prepaid card is the only way to zero out the card.
6) There is typically a use it or lose it clause or monthly service that erodes your pre-paid's value if you don't use the balance. This is the lie that it costs many dollars a month for the company to track your prepaid card balance for you (I disagree).
7) Beware the clauses on lost/stolen pre-paid cards. They are often considered same as gift cards or cash and thus have no recourse than be a total loss unless you can prove by police report armed robbery or loss uncontrollable by you such as being car jacked.
I had this happen once from a movie ticket purchase on Fandango. Bought some movie tickets, then a week later got an $80 charge from some place I had never heard of. I made a very loud argument to Fandango about enabling my credit card number to be fraudulently used, etc, etc. Within 2 two days I had all my money returned and some extra for the trouble, several free movie tickets, and a promise from Fandango that they would change the way companies advertise when they are sharing financial information, and indeed they did. People just need to just stay on top of their accounts, understand their rights and loudly speak up your intention of fully enforcing your rights and usually that's all it takes.