When I was visiting my parents a couple of months ago, my 89-year-old mother pointed to a pile of magazines she didn’t remember subscribing to: Wired (she has neither computer nor smartphone); Vogue, Allure, Elle, and Women’s Health (not exactly targeted to her age group); Bon Appétit (she hardly cooks anymore); and others. She wanted them stopped.
My inquiries revealed that she hadn’t subscribed directly to the magazines. It seems that a purchase for which she gave her Discover Card number came with the “bonus” of membership in a magazine buying club. She had no idea what I was talking about when I told her. She remembered no mention of a buying club when she bought anything over the phone.
Why hadn’t my parents noticed the $24.95 charge on months of Discover statements? My mother says my father checks the statements — an imprudent system when she does the buying by mail.
When I called Your Essential Savings, the buying club, the representative said the membership would be cancelled, although the monthly charge was still on their last statement. We asked Discover to try to get back the hundreds of dollars my parents paid Your Essential Savings. We’re not hopeful, since the club policy is to cancel but not refund.
As I was reviewing my parents’ Discover statements, I found another $24.95 charge for many months. They were in not one but two buying clubs. Unlike the onslaught of magazines, there was no tipoff about WC Savers, the second club — all of its so-called benefits (grocery store and restaurant discounts) are delivered online, and my parents aren’t online. They were paying $24.95 a month for nothing. WC Savers said they’d receive a snail-mail form to request a refund, but the form never arrived. Discover is disputing its charges, too.
Consumer advocates charge that buying clubs use deceptive advertising practices. The Federal Trade Commission found that buying clubs were one of the top three types of consumer fraud in 2011. The state of Iowa went after three companies and in 2014 secured more than $40 million for 400,000 Iowans entitled to refunds.
“Consumers often tell us they don't recall ever having spoken to the companies, and they don't understand how they can be charged when they have not given the company their credit card number,” said Iowa attorney general Tom Miller.
I should confess that I myself was tricked quite a few years ago. I accepted a free online offer for which I had to pay postage with my credit card. My suspicion alert kicked in shortly after I clicked to place the order. The fine print revealed that I would be receiving a cosmetic product each month that, as I recall, cost around $70 each time. It took many emails, phone calls, and threats of contacting regulatory agencies before my membership was cancelled.
As consumer complaints about buying clubs grew, Congress passed legislation in 2010 to prevent third-party sellers from getting financial information without having clear consumer consent. But Consumers Union warns that there is a loophole: Federal law applies only to online transactions, not telemarketing calls or direct mail.
My mother was deceived by a telemarketer. Other people cash small check awards mailed to their homes, not noticing the fine print that says they've agreed to a monthly fee. Elderly people like my parents who make purchases over the phone or don’t see the harm in cashing a check are common victims.
I haven’t urged my mother to stop buying over the phone. She’s mostly homebound, and shopping by mail is one of her few outlets. I have urged both my parents to look at their Discover statements for suspicious charges. When I was last there, I was dismayed that they hadn’t noticed that Your Essential Savings was still billing them in May.
I could lecture them more, but it would be hypocritical. I’m guilty of not looking closely at my own credit card statements. As soon as I post this, I should review my own Discover account.