A while back I noticed two back-to-back $100 charges to my favorite (and only) workout studio. I did recall making the purchase for a monthly, unlimited pass (which costs about $400), but only once.
Immediately, I made a call to the studio and explained the situation in a polite and friendly manner. I suspected that when I purchased the class pass using the studio’s mobile app I may have pressed the BUY button twice (Because the app was taking so long to process the purchase. I thought the page had frozen).
The studio completely understood and refunded me the charge on the phone. They also explained that this had happened frequently in the past with other clients and that they were working to update the mobile app to prevent this from happening in the future.
I hung up feeling great that I had realized the error and earned back my money…but also disturbed. Why hadn’t the studio called me to correct this, especially if they knew this was a recurring problem? How many other instances had I been double-charged? I did a quick search and luckily found no other issues. But ever since then I’ve been watching my account like a hawk.
I’m not alone in my experience with unwanted or “grey” charges and in fact, getting charged twice for something is pretty common. According to ProsperDaily, an app that tracks your card activity for mistakes and fraud, unwanted charges totaled more than $14 billion in 2012.
Remember this: Nobody cares more about your money than you. And with that in mind, here’s how we can combat billing errors on our own.
Regularly eye your statements…All of them.
Billing errors aren’t limited to your credit card or bank statement. They can appear on medical, utility and even mortgage statements. As you scan them each month (or throughout the month if you can) beware of common errors or worse, signs of fraud. This is especially important if you’re automatically paying off your balances and bills. It’s easy to forget to check each line item, but given the billions of dollars in billing errors each year, it’s so important to check.
Common false charges – or accidents – you may see on your bank or card statement include:
- A product or service you didn’t purchase
- A restaurant adding an automatic 20% tip to your meal – even though you already added a tip. (Always check the receipt before you leave!)
- A membership fee or subscription that you meant to turn off – but forgot.
Read your utility bills thoroughly, too, for any dubious charges like incorrect meter readings and double billing.
Finally, medical bills are notorious for errors. According to the Medical Billing Advocates of America, 80% of patient medical bills have mistakes and some can be very costly. Many times it’s due to human error, but the onus is often on patients to call them out and get them corrected.
Spot a mistake? Notify the source directly.
If you spot a mistake, the first step is to contact the source directly. Pick up the phone and call for a speedy response. Often, the merchant or biller can correct the mistake on the phone.
Remember to be respectful, polite and keep your receipts and account information handy. This will make fixing the error and tracking down information as efficient as possible.
When you speak with the vendor directly make sure you keep detailed notes. Take down the name of the person you spoke with, as well as their ID number if they have one.
Indicate the date and time of your phone call in your notes, as well. Having this information will make sure that you can keep a helpful trail in case you have to follow-up or eventually involve your bank or credit card issuer.
And, of course, if the merchant or biller is unresponsive, refuses to help or just gives you the runaround, then keep reading for your next move.
Alert your bank.
If the source is not complying with your request for help, contact your bank or credit card company – wherever the error has been placed. Credit card companies usually make it simple for you to dispute a charge online. They won’t hold you accountable for the cost until they resolve the issue (which may take up to two billing cycles to resolve). Almost always they want to know that you’ve first attempted to contact the biller or merchant, which is why it’s important that you document your efforts to communicate.
Know your rights.
Thanks to the Fair Credit Reporting Act (FCRA) consumers have the right to dispute a charge, have the charge investigated and be notified of the full results of the investigation.
There are also federal consumer laws that give consumers the opportunity to correct errors found on their debit or credit cards. The Truth in Lending Act (TILA) protects consumers with open-end credit while the Electronic Fund Transfer Act (EFTA) protects consumers with debit and electronics accounts. Under both acts, you have the opportunity to contact your lender or bank (within a certain timeframe) in writing notifying them of the error. Then, they must acknowledge your request and complete an investigation.
Leverage third party help.
Time is a precious commodity and reviewing all of your statements each month can be a challenge. To that end, there are third party platforms that can help.
Mint, for example, notifies users immediately if they’re being charged for any unnecessary fees, as well when they spot large or suspicious transactions.
ProsperDaily offers a “Smart Inbox” that shows each transaction from all of your cards and bank accounts and prioritizes them for your review while flagging any suspicious charges. By swiping left or right, you can either approve or flag the transaction. If you flag the transaction, ProsperDaily will also help you take the next steps to cancel or dispute the charge.
Over the last few years, ProsperDaily has flagged more than $700 million in fraudulent and grey charges.
Another proactive step is to make sure you’re signed up for big-purchase and fraud alerts on your mobile banking app.
Farnoosh Torabi is America’s leading personal finance authority hooked on helping Americans live their richest, happiest lives. From her early days reporting for Money Magazine to now hosting a primetime series on CNBC and writing monthly for O, The Oprah Magazine, she’s become our favorite go-to money expert and friend.