KANSAS CITY, Mo. -- A word of warning for holiday shoppers. More and more companies are using deceptive practices that cost consumers billions of dollars each year. They're known as "grey charges" and one in three ends up paying them, probably without knowing it!
All it takes is a click here and a click there. Online purchases seem innocent enough -- until you get the bill. They are there in black and white and referred to as ‘grey charges.’ The fees are undesired, but completely legal and catch many consumers, like Danielle, by surprise.
"It's just kind of part of the package when you sign up with a new cable company. ‘Hey, this is a free trial and we want you to try our services and you're busy with life.’ And life goes on until you get your invoice and you realize they started adding it on."
The holiday shopping season is a great time for companies to find new victims. Financial expert Jenna Johnson warns that now is the time to watch out.
"Companies know that people are so busy that they aren't going to take the time to read every single word in a disclosure when they buy something,” Johnson said.
There are five types of "Grey Charges"
Unknown subscriptions: When shopping online, if you don't read the fine print at checkout, you could be agreeing to another purchase.
Zombie subscriptions: You cancel a subscription or membership, it comes back from the dead and you're charged again.
Auto-renewals: This occurs when you're billed monthly or quarterly. Some retailers charge your card and stick you with an extra fee for that automatic billing service.
Free-to-paid: When you select a "free" trial and give them your credit card number----then the free trial runs out and they keep billing you for the subscription since you didn't cancel. This is the most common type of grey charge out there.
Cost-to-creep: The price of a monthly subscription goes up, usually a buck or two each statement. You may not realize because the company doesn't advertise the increase -- it's in the fine print.
"These charges are so small that if you're not looking at your account every day you'll miss them," Johnson said.
Johnson says there are ways you can protect yourself. Pay attention, nothing is free. Monitor your purchases and read the fine print. If you ask for a cancellation, get that confirmed in writing. Use a credit card instead of a debit card and report unauthorized charges to any account immediately.
Those are some of the tips that Danielle learned the hard way.
"If it's not something that you're willing to pay for, you may pay for it without knowing it, so you have to pay attention,” she said.
Why aren't more consumers aware of "grey charges"? The dollar amounts are small, usually between $12 and $18 a charge and post people admit to only skimming their statements.