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Visa, FTC and BBB partner to educate consumers about online scams

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Twenty-nine percent of online U.S. consumers victimized by deceptive marketing

Last week, the Better Business Bureau (BBB) joined Visa Inc. (NYSE: V) and the Federal Trade Commission in a press conference to alert consumers to deceptive online marketing practices associated with free trials with a negative option feature. According to a Visa survey, 29 percent of American consumers have fallen victim to deceptive marketing when unscrupulous e-commerce merchants require them to cancel or opt-out of a recurring charge for future products or services.

With free trials with a negative option feature, a company takes a consumer's failure to cancel as permission to begin charging. While many merchants use this billing process appropriately, others pre-check consent boxes, bury the details of the offers in the terms and conditions and make cancellations or returns difficult, catching consumers in a cycle of recurring charges for products and services they do not want.

"Most e-commerce merchants care about their customers and conduct business fairly, but even a few bad actors can cause consumer distrust," said William M. Sheedy Group President, The Americas, Visa Inc. "We want to let consumers know more about the protections they have against these types of practices and how to pursue a reversal of charges if they've been charged improperly."

Visa monitors its payment network to identify merchants with excessive levels of cardholder disputes which may indicate the use of deceptive marketing practices. In fact, merchants who use deceptive marketing practices have up to 20 times as many consumer disputes as the average e-commerce merchant. Visa requires the merchant and its bank to take corrective action to reduce excessive consumer disputes, or risk termination of Visa acceptance privileges.

According to the Better Business Bureau of Minnesota and North Dakota, consumers should research businesses before making their purchases. "Free trials sound harmless enough, but when it comes to online shopping, too many customers have discovered signing up for these "free" offers leads to unexpected monthly charges and unwanted headaches," said Dana Badgerow, president and CEO of the BBB. "Consumers need to understand that by clicking on these promotions they may be agreeing to an arrangement wherein their credit or debit card will be charged on an ongoing basis, unless they cancel before the trial period ends." Customers should always check the company's Reliability Report(r) with the Better Business Bureau before giving out their debit or credit card numbers.

Visa, the FTC and the BBB offers tips to online shoppers on how to spot deceptive free trial offers and deceptive negative option features, and how to deal with unauthorized charges:

* Take time to read and understand all terms and conditions, so a free trial doesn't turn into a costly purchase you didn't intend to make.

* Pay particular attention to any pre-checked boxes before you submit your payment card information for an order. Failing to un-check the boxes may bind you to terms and conditions you're not interested in.

* Review card statements when you get them for any unauthorized charges, and notify the card issuer promptly of any unusual activity or unauthorized charges.

* Try to resolve the situation with the merchant. If you're unsuccessful, contact the card issuer immediately to dispute the charge.

David Vladeck, Director of the Bureau of Consumer Protection said, "Online shoppers: If you see charges on your statement or debits that you didn't authorize, fight it. Start by contacting the merchant. If you are unable to contact the merchant or they can't or won't help, call your card issuer and then file a complaint with the FTC. You can do that online at <ftc.gov>, or by phone at 1-877-FTC-HELP."

The FTC has outlined five principles regarding the appropriate use of negative options, which call for:

* Disclosing material terms in an understandable manner, without making them unnecessarily long or inconsistent;

* Making the disclosures clear and conspicuous by placing them where consumers are likely to look on Web pages, by labeling disclosures (and links to them) to indicate their importance and relevance, and by using easy-to-read fonts and colors;

* Disclosing the offer's material terms before the consumer incurs a financial obligation;

* Getting consumers' affirmative consent to the offer by, for example, having them click "I Agree" And without relying on pre-checked boxes;

* Not impeding the effective operation of promised cancellation procedures and honoring cancellation requests that comply with such procedures.

Consumers who think they've been victims of deceptive marketing and who haven't been able to resolve the issue directly with the merchant should call their card issuer to dispute the charge. They also may report their experiences to the FTC at <www.ftc.gov/complaint>, or their local BBB at <www.bbb.org>. More information is available at <www.visa.com/negativeoption>.



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© 2010 Tri-County News Kimball, Minnesota. All Rights Reserved. This content, including derivations, may not be stored or distributed in any manner, disseminated, published, broadcast, rewritten or reproduced without express, written consent from DAS.

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