Fighting unwanted credit card charges… from your credit card issuer

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Lori Swanson must wonder if "Peggy" is secretly working for Discover Card, after all. As Minnesota's Attorney General, Swanson holds companies accountable to state consumer protection laws. After hearing about heavy-handed sales tactics used to sign customers up for monthly-billed service plans, Swanson filed a lawsuit to warn consumers about potentially deceptive phone calls.

Even though Discover repeatedly wins major awards for the quality of its customer service call centers, the phone calls in question came from the company's outbound telemarketing subsidiary. Although Swanson targeted Discover Card in her lawsuit, nearly every credit card company markets some form of added value service plan, often operated in partnership with outside marketing companies.

Preventing Unwanted Credit Card Service Charges

Most plan marketers announce their intrusion as a "courtesy call" from your credit card issuer, starting the conversation by confirming basic account details. The crucial detail, according to Swanson, is that some call center representatives use any affirmative language as permission to enroll you in the program. Operators justify their actions by telling customers that you don't have to pay or commit to the program until you receive a terms and conditions statement in the mail. Often, these materials arrive just days before the first charge shows up on your account. Most consumers mistake them for junk mail.

By saying "yes," "okay," or "correct" when an operator asks you to confirm the spelling of your address, you've given the call center a recording of your voice that's enough to validate enrollment, even if you change your mind later in the call. This is a common practice at many call centers, and it forces the consumer to make even more phone calls to dispute monthly fees and to cancel a plan membership. If you choose to listen to a telemarketer's sales pitch at all, carefully phrase your words as specific responses, like "the spelling is correct."

Because you conduct routine business with your bank, you're not automatically exempted from these calls by placing your phone number on the National Do Not Call Registry. Instead, calmly and politely invoke your credit card issuer's privacy policy with a phrase like, "I have opted out of receiving solicitation calls, please do not call this number again." Saying anything else, shouting at the operator, or just hanging up will usually get you a repeat call.

Getting the Same Credit Card Protection Benefits for Less

The Minnesota Attorney General also expressed concern about the services sold during the questionable phone calls. Consumer advocates have debated for years whether cardholders get any real value from protection plans and other added value services. Signing up for a special offer through your credit card company may be convenient, but there are plenty of alternative ways to get the same benefits for less money:

  • Payment Protection Plans: Swanson's office discovered that monthly fees could add up to $534 per year for a typical household. Stashing the same amount in a savings account or paying down your balance can save you more money in the long run.
  • Credit Monitoring Services: Even when marketers offer useful, legitimate plans, you could sign up for similar or even better credit monitoring services online for lower monthly fees.
  • Buying Clubs and Discount Travel: It's fun to think that your credit card can get you access to special discount deals, but the Internet has rendered most discount schemes obsolete.

Regardless of what happens in the Minnesota case, it's important to remember that you'll encounter calls like these no matter where you do your banking. Profit margins on these programs remain so high that credit card issuers can't resist them. When applying for a new credit card, ask to opt out from solicitation phone calls. Don't get angry or take these calls personally, just firmly request to be removed from the calling list.

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