Recurring payments on your credit card? Be careful, it could be a Subscription Scam!
Setting up automatic payments for services through our credit or debit cards is a very common practice today, especially when it comes to online services such as Amazon Prime or Netflix.
However, as this report indicates, there is a growing number of deceptive offers that appear every day offering succulent discounts and benefits if the user agrees to subscribe to receive some type of product or service, before which many people cannot resist and pay to enjoy such offers.
The problem comes a few weeks or months later when they realize that there are recurring and unusual payments on their cards for excessive amounts of money, and when they decide to cancel the subscription, they realize that it is almost impossible…
They have fallen for a subscription scam.
In this guide, you’ll learn everything you need to know to protect yourself against this common type of scam on the Internet.
What are Subscription scams?
Subscription scams are one of the many fraud methods that are scattered all over the internet and whose main feature lies in trying to trick you into signing up for a subscription service or free-trial for a particular product. The ultimate goal of this scam is to obtain your personal data, mainly those of your credit or debit cards, to make automatic charges on them every certain period of time.
Although there are many legitimate companies that use the subscription business model, scammers have learned to mimic very well the appearance and behavior of legitimate offers in order to deceive less cautious customers. The user profile targeted by these scammers are mainly people who are not tech-savvy or cautious regarding their money. Keep in mind that these criminals often impersonate major companies as well, sending text messages or emails to present tempting offers or to report service renewals.
On the other hand, many times, the modus operandi is to motivate you to click on a link that takes you to a fake company website so that you provide your personal and financial data, something that scammers can also use to commit identity theft crimes.
How to identify Subscription scams
There is a series of red flags that you should be very attentive to, and that will allow you to determine if you are being a victim — or have been a victim — of a subscription scam. Here are the most important signs.
You are presented with an offer you cannot refuse
Usually, scammers use very subtle pressure tactics that seek to exploit aspects of human psychology. In this case, they might try to contact you either by phone, email or online and present you with an incredible offer that you could lose if you don’t take advantage of it right away.
The trick is to put fear-inducing pressure on you to think that if you don’t agree to subscribe, you won’t get another chance like that because they won’t give you time to think twice. In other words, if the offer is too good to be true, it’s probably false.
The subscription contract doesn’t present all the information that it should
When scammers get someone to sign up for one of these fake subscriptions, they usually deliver the service — or part of it — to the new customer. However, the contract hide clauses that are not usually evident if the user doesn’t intend to investigate well.
In many cases, a contract may clearly state that you will be charged a fixed amount of money on a monthly basis for the service, but another part of the contract states that you will actually be charged that amount several times per month, usually through some conditional clause which you are not aware of.
An example of this type of clauses is that you pay, let’s say, $30 per month, but for the first three months of service. After that period, the cost of the subscription will skyrocket.
You cannot cancel the subscription
Suppose that, after some time, you decide to cancel the service you are receiving because you no longer want it or you simply realized that you are being scammed. This is where the most dramatic part of the scam comes in, as the criminals will do everything in their power to prevent you from unsubscribing.
- On the company’s website – You try to cancel the subscription directly on the website, but find out that there isn’t even an option to cancel. On the other hand, if you find information on how to cancel the service, you’ll soon realize that the number of requirements they ask for are impossible to complete.
- By phone – In case you manage to contact the company, they tell you that you cannot cancel the service because the contract doesn’t include a cancellation clause. Note that at this point, scammers may even try to threaten to take legal action against you if you stop paying for the service.
- On your card bills – You can’t find any contact information for the company and if you do, they never reply or simply take months to reply, finally giving you a meaningless reply that doesn’t help you at all.
How to protect yourself against Subscription scams
Although subscription scams are not something new, in recent years, the number of scams of this type has increased significantly, especially on the Internet. Now that you know how to identify these scams, it’s important that you also know how to act at all times to prevent the situation from getting worse.
Tips to prevent failing for a subscription scam
- Ignore any emails or texts from companies you don’t know, especially if you haven’t shared your contact details with these companies.
- If you receive an email from a company with which you have a subscription indicating that it is time to renew the service, verify the sender’s address or call the company to confirm if the email is authentic.
- Never click on any link inside any email or WhatsApp message, especially if you don’t know where the message came from, as it could contain some kind of malware.
- Make sure you read and fully understand the terms of the contract and ask questions about any shady clauses.
- If you decide to pay for the subscription, first make sure there is an option to cancel it whenever you want.
- Likewise, research about the service provider very well before giving your financial information.
- Try to save screenshots or any other similar evidence of the provider company’s advertisements and offers.
- Check your bank and card statements regularly to make sure there are no unauthorized charges.
How to act in case you have fallen for a subscription scam
Try to contact the company to try to cancel the contract. If this action is not possible, contact your bank to cancel future payments as a first protection measure. Ask your bank for a chargeback of fraudulent charges that have already been made by scammers. You can also discuss with your bank the possibility of giving you a new debit card and even changing your account numbers to prevent future charges.
In the event that the fraudulent charges are on your credit card, the next step is to try to contact your card issuer. The idea is to ask the issuing company for a chargeback. Please note that in this case, you’ll need to explain the reasons for your request and provide any evidence of fraud requested by the issuer.
It’s very likely that your card issuer will block all future transactions the scammer tries to make, especially if they’ve received many chargeback requests for transactions from other customers involving the same merchant.
Since there is a chance that scammers will send your bills to collection agencies to force you to pay, when you are contacted by one of these agencies, ask for proof that you owe money. Most likely, they won’t be able to provide such proof, so they will drop the case and you will be protecting your credit score.
Where to report Subscription scams?
Finally, report the fraud to the appropriate entity, in this case, the Federal Trade Commission (FTC).
The FTC is a government agency tasked with pursuing and fighting all types of frauds related to businesses. With the information you provide about your particular case, the agency can build a legal dispute against the scammers. Please note that to file a complaint with the FTC, you will need to provide the following information:
- Your contact information
- Receipts or bills for the services paid
- Information about the merchant
- Additional details about the transactions
On the other hand, remember that you can always report scams on platforms such as scamwatcher.com to contribute to the fight against this and all kinds of fraud and scams on the internet. Note that you can also use the platform to search for and obtain information about dubious offers that you may find while browsing the web. In this way, the platform can also help you prevent headaches and protect your money from unscrupulous people.
The bottom line
Subscription scams are a common type of scam today, so raising your defenses against any red flags is key to avoiding falling for a potential fraud.
Bear always in mind the preventive tips that we’ve already mentioned in this guide and in case you fall into a subscription scam, also remember that the most important measure is to act as soon as possible to avoid future charges, contact the respective financial institutions to try to recover your money and proceed to report the fraud to the competent bodies and on platforms such as scamwatcher.com, so that we can fight fraud together.