CONSUMER ALERT

BILL SCHUETTE

ATTORNEY GENERAL

The Attorney General provides Consumer Alerts to inform the public of unfair, misleading, or deceptive business practices, and to provide information and guidance on other issues of concern.  Consumer Alerts are not legal advice, legal authority, or a binding legal opinion from the Department of Attorney General.

CREDIT CARDS

(Did I Charge That?)

Complaints about credit cards continue to be among the most common consumer complaints received by the Attorney General's Consumer Protection Division.  Many of the problems can be avoided or resolved if they are recognized and addressed quickly.  Here are some tips:

• Guard your credit card information.

Armed with your credit card information, telemarketers or over-zealous vendors may place charges on your credit card that you have not authorized.  In some instances, financial institutions or merchants with whom you do business may share credit card information with other companies selling various products and services, who in turn use this information to make unauthorized charges against the credit card account.  

Find out your credit card company's information sharing policy.  "Opt out" of credit card contract terms that allow the card issuer to share your account information with third parties.

Don't provide credit card information over the phone unless you placed the call, especially to telemarketers or persons claiming to be from your bank or credit card company.

Don't provide credit card information as 'verification' or a means of identification.

Don't provide credit card information in exchange for a product or service that is to be provided on a 'trial basis.'  Such offers may contain conditions, easily overlooked, that permit an automatic purchase to be charged to the credit card at the trial period's end.  

• Scrutinize your credit card bills every month for errors, especially charges for goods or services that you do not recognize.  

Don't pay for charges that you did not authorize!  Instead, notify your credit card issuer immediately upon discovery of the misuse.  Under Federal law, cardholder liability for unauthorized credit card use is limited to the lesser of $50.00 or the amount of money obtained by the unauthorized use before notification to the credit card issuer. 

• Read all the small print on credit card offers before agreeing to accept a new card.

Avoid surprise charges, fees, or disputes before they arise by reading all terms and conditions contained in a credit card application in full before you sign up.  In particular;

à         Watch for mandatory "membership" or other fees that are automatically charged to the card if it is accepted.

à         If the card promotes a special introductory low finance rate, find out how long the low rate applies, and the amount of the finance rate after the introductory period has expired.

à         Be sure that the card does not include an automatic purchase of some other product, such as a magazine subscription, that will be automatically charged to the card if accepted. 

à         Avoid or opt out of contract terms providing for binding arbitration or information sharing with other companies.

·         Notify your credit card company in writing of disputes regarding property or services paid for by the credit card, when you have not been able to resolve them directly with the retailer.

Federal law permits cardholders to withhold payment for the purchase price amount of a disputed item, without risking adverse credit reporting, when: (1) good faith attempts to resolve the dispute directly with the seller have not been successful, and (2) the price of the item in dispute was more than $50.00, and (3) the sale took place within the same state or 100 miles of the cardholder's current designated address.

While all other charges on the credit card remain due and payable, payment of the disputed purchase will preclude your right to assert a claim against your credit card company.