3OYS: Beware of 'Grey Charges'

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by 3OYS

Video report by Gary Harper

Posted on December 2, 2013 at 9:59 PM

Updated Tuesday, Dec 10 at 1:13 PM

PHOENIX -- Marla Horning says she tries to take good care of her face. "I've been using Oil of Olay for years and I've been very happy with it," she says.

But Marla came across a new product from a company called Equinox which had a "free" offer for two jars of facial cream.

Marla says she ordered Equinox, but wasn't happy with it. So she sent the facial product back. And why not?  It had a 30 day free trial period. But free turned out not to be free at all.

Even though she sent the product back, Marla reviewed her bank statement and noticed Equinox had charged her nearly $100 for each jar, claiming she had to cancel within 14 days of the "order date."

“There are ways where people are being taken advantage of, in a way they weren't anticipating in charges that are occurring," says Joe Gleason, a financial adviser here in the valley. He says what happened to Marla is a perfect example of something called “Grey Charges."

Grey charges are hidden fees or charges that consumers pay for either because they overlooked the charge or paid it, thinking it was for another purchase they made.

Some of the most common grey charges are:

1. UNKNOWN SUBSCRIPTIONS: This is common when you are completing an online order.

“There's a checked box that says we can add on this extra service or product and they don't even realize it, it's down on the corner, they're not paying attention to it, they just finish their check out and unbeknownst to them, they have made this additional purchase, says Gleason.

2. AUTO-RENEWALS:

"Where people think they're signing up for a certain period of time, so maybe, I'm gonna sign up for this for a certain period of time, but in the fine print there's a provision that if they don't call an cancel it automatically renews for an additional 6-months," Gleason warns.

3. ZOMBIE CHARGE:

You see these things a lot of times with gym memberships or magazine subscriptions. “You think it's run its course and you've canceled it but then a couple months later it pops up again and there it is on your credit card statement," Gleason says.

4. FREE to PAID:

It's perfect example of what happened to Marla. You think you're getting something for free like that free facial cream, only to find out the product is automatically added on as a monthly subscription. It’s the most common grey charge because the word "free" is always enticing

5. COST-CREEP:

Something starts out at one price but gradually each month creeps up in price, and it's written somewhere in the fine print that you agree to the increase.

That's what makes grey charges legal and what makes businesses a lot of money. "Approximately $14 billion a year as a whole that Americans are being charged in grey charges," says Gleason.

Marla says she's angry.  All she wanted to do was try a free product. But instead, she wound up getting a grey charge of $200.

"Be very careful of things that you see for sale online.  Do a lot of checking before you ever order and be sure to read the fine print."

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