Continuity billing is a term for a marketing scam used by online merchants, and it is causing major headaches for many consumers. While it may sound similar to autopay, it isn’t quite the same because consumers are usually unaware of recurring charges.
The problem starts simply by agreeing to a small charge for a product, but later on, there are recurring charges on your credit card for much larger amounts. Then, you get your credit card statement and find these charges that you never intended to authorize.
What You Should Know About Continuity Billing Schemes
Continuity billing scams are fairly easy to run online because consumers are typically in a hurry and don’t read all of the fine print. People see a long disclosure of financing, account, and privacy policies, and they click a box agreeing to the terms without even looking at them. Part of the problem fighting the charges later comes from the fact that the merchant can usually produce documentation showing that the consumer did agree to the billing, even if they weren’t aware of it at the time.
The problem compounds if you don’t check your credit card statements closely each month. You may get your statement, see that it looks about right, and just pay it. Several months may go by before you even notice the charges. Maybe you notice the charge the first month but don’t make the time to track down the charge and end up getting billed again for a second month.
Continuity billing schemes take advantage of the fact that people are busy and don’t take the time to investigate relatively small, unknown charges quickly. It also capitalizes on those who don’t check their billing statements every month.
What Should You Do If You Are the Victim of Continuity Billing?
The first thing you need to do if you think you are the victim of a continuity billing scam is to act quickly. Don’t let another month go by before you decide to take action. Since the merchant’s name and phone number are included on your credit card billing statement, contacting the merchant should be your first step.
It is always possible that what you suspect as a continuity billing scheme is just a legitimate charge that you forgot about authorizing. For example, it could be a quarterly or annual membership fee that you forgot about. A quick call to the merchant can help to sort that out. If you figure out during the call that you have been the victim of a continuity billing scheme, ask the merchant to cancel all future charges.
Unfortunately, if you are dealing with a company engaged in a continuity billing scheme, there is a good chance they won’t actually stop the billing even if they say they would. The next step should be to contact your credit card company about disputing the charge. You can dispute a charge and initiate a chargeback to the merchant either by calling your credit card company or by filling out a form online.
It’s actually important to go ahead and do this from the beginning because there is a time limit on disputing a credit card charge. Under federal law, consumers only have 60 days from the time the charge first appeared on their account to initiate a chargeback. This step is typically good enough to stop further charges from occurring on that card.
Author: Jeff Gitlen
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