100 merchants lose Visa capabilities for negative option scams
Visa has made the decision to terminate services to 100 merchants using questionable marketing called negative options to scam customers. The most common scam is billing customers for what appeared to be a free trial of a new product. Negative options often include fine print and pre-selected options for the charges that the customer must track down to uncheck to opt out of the charges.
“We’ve been monitoring this situation from this summer in particular,” William M. Sheedy, Visa group president said. “Consumers are being fleeced.
Visa noticed a trend in more customer complaints about ongoing card charges for purchases that had been approved. The products varied, but the situation was usually similar. Ads often feature unauthorized photographs of celebrities that appear to be endorsing a new product. The consumer is lead to believe that they are signing up for a free offer and simply offering credit card information to pay for shipping and handling. What customers don’t realize is that they have agreed to ongoing charges by entering the card information.
“The game here is to get people hooked, keep them on the hook for monthly charges as long as you can, and only stop making those changes when you’re forced to,” Stephen Salter, vice president of BBB Online said. “The product is irrelevant to getting the charges on the card.
While it is misleading, negative option marketing is not illegal. Consumers are advised to carefully read all fine print and details before entering any payment information online.
