There’s a great article in today’s New York Times about a reporter discovering a $10 fee from a company she didn’t know in her bank statement, and tracking down to the source. It turns out her husband had signed up without realizing it, and she only found it by looking through their bank statement carefully:
The other day, as I was trying to avoid making eye contact with $168.09 (jeans and a T-shirt) and $40.24 (how can a tank of gas cost that much?), I happened to notice a mysterious $10 charge.
It was for WLI*RESERVATIONREWARDS.CO.
It didn’t ring a bell. Was Reservation Rewards a surcharge for a hotel room? A magazine subscription? Or a digital audio download?
I phoned the toll-free number. A customer service representative told me that my husband had enrolled in a subscription service that offered members discount coupons for travel and restaurants. The cost was $10 a month.
That didn’t sound like my husband.
“Maybe when he bought something else,” the customer service representative said. “Like on Fandango.”
She describes that a $10 rebate offer appeared as a pop-up ad, “Good for your next Fandango purchase!” and that all he had to do was enter his email address, since Fandango already had his credit card information. In the fine print, which he didn’t read, it said that by taking the offer he was signing up for Reservation Rewards monthly service. But the punchline came later:
The next day, it got worse. That was when my husband received an e-mail message telling him that he had been a Reservation Rewards member since November 2005.
He phoned from his office to read the message: “We have issued a refund of $160.”
“They charged us $160?” I asked. “You were a member for 16 months?”
“I’ll never buy tickets at Fandango again,” he said.
There’s more to the piece, including an interview with Reservation Rewards’ CEO, and a mention that they are currently subject of a class action lawsuit about their practices. (That link also includes a list of all the sites with which they’ve partnered — and it’s a long and familiar list.)
I think very poorly of these kinds of businesses. Consumers’ wallets are constantly taxed by monthly fees, charges, subscriptions, and penalties that offer them little or no benefit, and act as deadweight loss on their income. Here are a few tips for avoiding charges like these:
- As the author of the article suggests, go over your bank and credit card statements carefully. Of course we hope this is one of the benefits of Wesabe, that you have better tools for going through just the new charges, and that you can research any merchant that shows up in your statement to find out what they do and whether they’re worth it for you. However you check your statements, though, be sure that you do.
- Ask for refunds of charges you don’t recognize. Every time you see a fee or a charge you don’t recognize, ask what it is, and ask what you have to do to remove it and have it refunded. This works for all kinds of fees, from the subscription charges the author found, to account fees, overdraft fees, and others.
- Block pop-up ads. We very strongly recommend the Firefox web browser, since it has pop-up blocking and other security and privacy features built-in. It also does a great job of letting you get to a pop-up window on those rare times when you want to see it. By default, though, you should never have to see those ads.
It turns out that 17 Wesabe users have charges from Reservation Rewards, totaling $397.00. Because of the way our privacy wall works, we have no way of knowing who those people are, but I’ve written a Wesabe tip pointing to the article, matched against “Reservation Rewards” as a merchant name. Now, whenever a Wesabe user gets one of those charges, this is what they’ll see in their accounts:
That tip link has pointers to the Times article, the class-action information, and the toll-free number you can call to ask for a refund. This is one of the big ideas behind Wesabe — one person does the research to root out this charge, and everyone on the site benefits. It’s easier to watch your statements closely when they’re telling you right there what to look for.
I’m glad this reporter tracked down the charge. Hopefully, having this practice highlighted in the New York Times will make it harder for them to continue doing business by taxing consumers with underhanded offers.