(KPLR) – There’s a new concern for consumers – one that could be costing them hundreds of dollars each year. They are called 'grey charges' and one in four people are paying them right now, most likely without knowing it.
Financial professional Doug Kiffmeyer from Kiffmeyer MRPG explained what grey charges are and how to look out for them.
Q: What are grey charges?
A: This is a new and growing trend of sneaky, unwanted, but completely legal fees that are catching many consumers by surprise. Companies know that people are busy and don`t have time to read every page of the disclosure. These grey charges are buried in the fine print. So it`s completely legal- and ends up costing consumers an average of $356 per year, according to a December 2012 report from Billguard.
Q: What do people need to look out for?
A: There are five types of grey charges:
1. Unknown Subscriptions: We`ve probably all seen this when making an online purchase- another offer or discount at checkout. You usually have to click or unclick the box. Be careful- if you don`t read the fine print you could be agreeing to another purchase!
2. Zombie Subscriptions: You cancel a subscription, let`s say a magazine subscription or gym membership and you aren`t being charged for a few months - but then a few months later, it`s back from the dead and you are being charged again. It`s usually an oversight or mistake on the part of the company, but unless you catch it and point it out, you`re giving your money away without getting anything for it.
3. Auto-Renewals: This occurs when you sign up for a service that bills you monthly or quarterly. Some retailers will not contact you before each payment is due- simply charging your card and sticking you with the card because you were 'too late'.
4. Free to Paid: Warning!! When you are getting something for free and you have to cough up your credit card, there is usually a catch! It may be free for a trial before it converts into a permanent subscription.
5. Cost Creep: You think you`re signing up for a monthly subscription for a particular amount like $5.99, but the cost creeps up slowly each month to $6.99 or $7.99. You may not realize because the company doesn`t advertise the increase each month - but it`s in the fine print.
Q: Why aren`t more consumers aware of these charges?
A: First, because the dollar amounts are small- usually between 12 and 18 dollars a charge. But mostly because people don`t really look at their credit card bills or bank statements. 9 out of 10 people say- at most- they skim them quickly for large purchase, according to a Billguard survey.
Q: What should consumers do to protect themselves?
A: First, pay attention! Nothing is free!
Monitor your purchases- that means really look at those credit card and debit card statements
Read the fine print
If you find an unknown or unauthorized charge, report it immediately
Use a credit card instead of debit card- they offer more consumer protection