Grey charges: “Deceptive and unwanted credit and debit card charges that occur as a result of misleading sales and billing practices.” Technically, grey charges aren’t considered fraud because the legalese spells it all out, and trusting consumers sign on
the dotted line. Merchants know levying grey charges is legal, but they also know it’s unethical, and they don’t seem to care.
Free-to-Paid. Consumer receives goods free for a trial period. After the trial period, the seller automatically charges a fee unless the consumer affirmatively cancels or returns the goods or services within the obscure return period.
Phantom. Consumer completes a primary transaction and receives an additional product from the seller or a third party that is distinct from the party offering the initial product.
Service and Luxury Fees. Charges paid to acquire luxury items and for the privilege of having a bank account, special card, processing a special request, etc.
Zombie. A subscription or membership that doesn’t end even after it has been canceled.
Unintended Subscription. Consumer completes a one-time transaction that turns into an unwanted and ongoing subscription.
Misleading Advertising. Occurs when a consumer is presented with an advertisement containing false promises, unsubstantiated claims, incomplete descriptions, false testimonials or comparisons, partial disclosures, visual distortion of the product being purchased,
or qualifications presented in small-print.
Membership. Consumer joins a discount club. In exchange, the consumer agrees to receive merchandise periodically unless the club is notified not to send it. If the consumer takes no action on time, the seller charges the consumer and sends the goods.
Unwanted Auto-renewal. Consumer enters into an annual agreement to purchase goods or services. If the consumer does not cancel the arrangement prior to the cancellation deadline, the seller automatically renews the subscription for another term and bills
the consumer the requisite fee without formal notice.
Unintended Purchase. Misleading information during a sign-up process leads to an unintended purchase.
Hidden Fee. Extra charges that were either non-disclosed or deceptively disclosed that were added to the price originally agreed to by the consumer.
Other. Includes charges that the consumer finds deceptive. However, they aren’t considered fraudulent and don’t clearly fall into one of the other categories.
Don’t get taken! Here’s how to outwit the grey chargers:
- Scrutinize your statements carefully,
- Demand refunds when grey charges occur,
- Threaten a “chargeback”, which is a transaction in which a bank pulls money back out of a merchant’s account, and