Thought-Provoking Thursday: Is Your Bank Account Seeing Grey?
Who among us, when presented with a pages-long “Terms and Conditions” agreement for something as simple as a $0.99 song on iTunes or a $10 ticket on Greyhound, hasn’t clicked “accept and continue” without reading all (or any) of the agreement? After all, it’s just a cheap purchase, nothing as serious as a mortgage or college tuition. However, according to a new study, skipping or misunderstanding the fine print could be costing us a lot more money than we think.
Research conducted by the Aite Group on behalf of Billguard.com found that Americans lost $14.3 billion last year due to grey charges — fees disclosed in the confusing and deceptive Terms of Service agreements we so often ignore. Grey charges are not illegal, but instead the result of unclear contracts and sneaky billing practices.
“Many of us buy airline tickets online and check in [online] to get boarding pass. In process of doing that, this language might be presented to the customer: ‘do you wish to decline travel insurance?’” explained Ron Shevlin, a senior analyst at the Aite Group. “Someone might say no. But technically, they said, ‘no, I don’t want to decline travel insurance.’ So then they get hit with a bill for travel insurance.”
Who among us, when presented with a pages-long “Terms and Conditions” agreement for something as simple as a $0.99 song on iTunes or a $10 ticket on Greyhound, hasn’t clicked “accept and continue” without reading all (or any) of the agreement? After all, it’s just a cheap purchase, nothing as serious as a mortgage or college tuition. However, according to a new study, skipping or misunderstanding the fine print could be costing us a lot more money than we think.
Research conducted by the Aite Group on behalf of Billguard.com found that Americans lost $14.3 billion last year due to grey charges — fees disclosed in the confusing and deceptive Terms of Service agreements we so often ignore. Grey charges are not illegal, but instead the result of unclear contracts and sneaky billing practices.
“Many of us buy airline tickets online and check in [online] to get boarding pass. In process of doing that, this language might be presented to the customer: ‘do you wish to decline travel insurance?’” explained Ron Shevlin, a senior analyst at the Aite Group. “Someone might say no. But technically, they said, ‘no, I don’t want to decline travel insurance.’ So then they get hit with a bill for travel insurance.”
This is just one form of a grey charge; the Aite research noted that everything from unintended subscriptions to “zombie charges” (a fee for a subscription that you have tried to cancel) counts as a grey charge. According to the research, one out of ever three debit and credit card holders are affected by grey charges and lose an average of $215 per person per year to these fees. This, Shevlin said, is happening more than ever before.
Why the uptick? “[It] has a lot to do with how payment behavior has shifted away from payments in cash to credit and debit card,” he said. “It is impossible to hit someone with a grey charge when consumers are paying with cash or check. But when you have somebody’s card number on file, you can then go back and incur charges on that card.”
Mary Ann Keegan, chief marketing officer for Billguard, which charges $45 per year for a service that helps track charges on up to ten of your family’s credit and debit cards (or free if you only want to track two cards), said that the key to preventing grey charges is to track your spending and frequently check your bank account. She says to keep an especially close eye on services you’ve subscribed to because they’re free for a promotional period but carry a cost later on — what Billguard has dubbed “free to paid” charges.
“If you are subscribing to any of these free to paid services, keep it on your calendar and make sure you’re monitoring it,” Keegan said.
Finally, Keegan acknowledged that very few people have time to read the full Terms of Service attached to a purchase, but said that if you can, pay attention to one particular section of the contract.
“Open up the Terms of Service and scan to area where it talks about how to cancel the product you’re subscribing to,” she said, “and read it carefully.”
