Gray charges: Sneaky, but legal - Toledo News Now, Breaking News, Weather, Sports, Toledo

What you need to know about gray charges

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(Toledo News Now) -

Imagine paying extra cash each month, even hundreds of dollars a year, but you have no idea. The latest way for companies to make big bucks is with gray charges.

They're legal and sneaky, so how do you know if you're paying for them? One out of every four is, but you can avoid it.

From the bottom of the ocean, to snow-top covered mountains, travel blogger Kim Orlando writes and tweets about her many adventures. To make life on the road easier, she paid a company for a trial subscription to track reaction to her tweets.

"I thought I was going to pay $149 for that one month," said Orlando.
  
Instead, she was billed four months in a row, with something she said she never signed up for. She points to an e-mail from a company representative as proof.

Experts say a trial subscription turned permanent is just one type of gray charge.

"Gray charges are unwanted, sneaky, little charges that are - that are starting to show up on consumers' credit statements and bank statements," explained Jeffrey Cutter, a financial expert.

How do businesses get away with it? A survey found eight out of 10 people merely skim their credit card and bank statements.

"I'm embarrassed to say that it took me four months to figure out I had been billed every month," said Orlando.

What other gray charges could pop up on your bills? Unknown subscriptions. That's when you make an online purchase and forget to click or unclick one box, so you end up opting in for another purchase.
 
"Over the past half a year, we have seen more and more of these charges," said Cutter.

Another way for companies to run off with your money is by using zombie subscriptions. For example, if you cancel a gym membership or magazine subscription, sometimes charges will "come back from the dead" a few months later.

One more creepy charge is called cost creep, in which a monthly subscription slowly increases in price.

Many gray charges are legal if businesses spell them out in terms and conditions, which most of us just skim, unfortunately.
 
"Make sure when you are purchasing anything, that you read everything and understand exactly what you're doing; that's partially your job," said Jerry Cerasale, with Direct Marketing Association.

Federal regulations require that offers be clearly and conspicuously disclosed. The Federal Trade Commission says it's been getting consumer complaints about gray charges recently. The Direct Marketing Association says sometimes they're a misunderstanding, but admits other times, companies just don't follow the rules.

"There are bad actors, but don't let that stop you. Trust the good marketers," said Cerasale.

Orlando challenged her gray charges, but said the company insists she signed up. It's now in dispute with her credit card company.   

Despite her busy travel schedule, Orlando's now going to check every charge on her statements and has this message for the "bad actors."

"That's just going to make me an unhappy customer. I'm certainly not going to sign up for anything that they have to offer in the future," said Orlando.

The FTC and Direct Marketing Association have taken action against companies who charge consumers without properly disclosing the conditions of an offer. If you feel you've been unfairly charged, report it.

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