| For Immediate Release: | CONTACT: | Holly Anderson, ext. 114 |
| July 25, 2000 | ||
| (202) 835-3323 | ||
WASHINGTON, DC—Consumers are finding charges on their credit card bills and debits from their bank accounts for memberships in buyers clubs that they never agreed to join or didn't agree to renew after the initial trial offer, according to the National Consumers League, a nonprofit advocacy organization. Complaints about buyers clubs to NCL's National Fraud Information Center, a hotline for consumers to report telemarketing fraud, are on the rise, from an average of 4 per month in 1999 to 12 per month in the first six months of this year. Buyers Club complaints currently rank as the ninth most common telemarketing complaint.
In some cases the charges or debits have appeared after consumers called to buy merchandise such as beauty products and lighting fixtures that were advertised on television. "Typically the products are offered for very low prices, or they may be free but the consumer pays for shipping," explained NFIC director Susan Grant. "What consumers may not notice is a disclosure in fine print on the TV screen that purchasers will be enrolled in a club that offers discounts on other products." In other cases, consumers have received calls from telemarketers selling products and offering, in addition, buyers club memberships. Sometimes they are described as "free trial offers" but the charges are made immediately. Other consumers report being charged for memberships despite the fact that they said they only wanted the merchandise and didn't want to join the club.
And some consumers say they have received "welcome packets" for club memberships even though they did not recall having any contact with the company. These included notices that the consumers would be charged unless they contacted the company to cancel-but when they called, the consumers couldn't get through or were told the charges would not be removed.
At the public workshop that the Federal Trade Commission will hold on July 27 and 28 as part of its five-year review of the federal Telemarketing Sales Rule, NCL will urge the FTC to look closely at these buyers club problems. NCL will also suggest that the FTC plug some loopholes in the rule and strengthen it by:
including under the rule calls that consumers make to marketers in response to advertisements in the newspaper, on television, and other general media;
requiring telemarketers that make "trial offers" to notify consumers when the free time period is up and get their consent to be charged for continued services;
requiring telemarketers to tell consumers that they have the right under federal law to be put on the companies' "Do Not Call" lists if they do not wish to hear from them again.
Consumers should be wary of offers that involve very low prices or free products. "These offers may only be the lure to get your credit card or bank account information," observed Grant. She also cautioned consumers to look at their credit card and debit card statements carefully. "Once someone has your account number, it's possible to charge you or debit your account even if you never agreed to purchase the services," she said. Consumers who find unauthorized credit card charges or debits should dispute them immediately with their credit card issuer or bank.
The top ten telemarketing frauds reported to NCL's National Fraud Information Center in the first six months of 2000 are:
Prizes and Sweepstakes-phony prize awards requiring payment of fees first
Magazines-fake sales or renewals for magazine subscriptions that are never received
Credit card Issuing- phony promises of credit cards requiring advance payment of fees
Work-at-Home- kits sold with false promises of profits
Advance Fee Loans- empty promises of loans requiring advance payment of fees
Telephone Slamming-phone service is switched without the consumer's knowledge or consent
Credit Card Loss Protection- unnecessary insurance sold using scare tactics or misrepresentations
Telephone Cramming- billing consumers for optional services they never ordered
Buyers Clubs-unauthorized charges for memberships in buyers clubs consumers never agreed to join or didn't agree to renew after initial trial offer
Travel/Vacation- offers of free trips or discount travel that never materialize
The National Consumers League, founded in 1899, is America's pioneer consumer organization. NCL's three-pronged approach of research, education, and advocacy has made it an effective representative and source of information for consumers and workers. NCL is a private, nonprofit membership organization dedicated to representing consumers on issues of concern.
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