Consumer IQ 101: Mind the Pre-Checked Boxes

Financial IQ

Beware of the boxes.

That’s what James Pham learned when he signed up for a credit card recently.

Specifically, boxes that are pre-checked for your “convenience” — ah, there’s that word again — and may nudge you into making a decision that could cost you money.

He recently opened a co-branded credit card for a big-box store, which allowed him to save $25 off a purchase. He didn’t use it again.

“The next month, I got a notification saying that the rest of the bill was owed, with only the minimum being paid the first billing cycle,” says Pham, a writer and photographer.

Something didn’t make sense. Pham says he always pays his credit card in full (a type of customer credit cards refer to as “deadbeats” because they are less lucrative).

“I checked my bank statement, and sure enough, only $25 was paid on the bill,” he says. “I might have chalked this up to user error, clicking “Pay minimum” instead of “Pay statement amount”, but since I also use Quickbooks to log all my transactions, I had an entry there stating I paid the amount in full, with the requisite accompanying confirmation number.”

In other words, he thought he’d paid off the bill, but he hadn’t.

For the second billing cycle, which levied a $1 fee for not paying the balance in full, he made sure he clicked “Pay statement amount.”

Then he watched in surprise as the screen refreshed with the “pay by” date and then re-set the amount to “pay minimum.”


“I believe this is a scam,” he says. “They’re resetting a choice that the consumer has already made, in hopes they won’t notice it and pay only the minimum balance.”

Negative Option Scams

This type of opt-out trick is a subset of what’s known as a “negative option” scam, and slightly less than a quarter of Americans fall for it, according to a survey by the Better Business Bureau and the Federal Trade Commission (FTC).

The most common negative-option scams involve magazine subscriptions or clubs that automatically force you to opt out of renewing them every year.

The only sure-fire way to prevent yourself from getting ensnared by one of these scams is to read all the terms and the entire screen before you click the “buy” button. Otherwise, you could get swindled.

How to Fight It

Once you see fraudulent charges, there’s only one thing to do. As David Vladeck, the director of the FTC’s Bureau of Consumer Protection advised, “Fight it.”

“Start by contacting the merchant,” he adds. “If you are unable to contact the merchant or they can’t or won’t help, call your card issuer and then file a complaint with the FTC.”

You can contact the FTC at or by phone at 1-877-FTC-HELP.

That’s exactly what Pham did. He contacted the credit card in writing to find out if this was just a misunderstanding. The response?

“Your payment due date is prefilled as a courtesy. If you would like to change the payment due date, double click on the payment box and a calendar will pop up and allow you to select a new payment date. We apologize for any confusion while attempting to change the payment due date.”

Not quite the answer to his question.

“Due to the nature of your inquiry,” it added, “we are unable to accommodate your email request.”

Translation: We’re not going to talk about our pre-checked boxes in writing. Wouldn’t want our answer getting all over the Internet now, would we? It did, however, refund the $1 fee.

Mind Your Boxes

Do I really have to tell you that pre-checking a box for your “convenience” might not always be convenient for the consumer?

A few years ago, online travel agencies learned the answer the hard way when states began to crack down on their practice of opting consumers into buying travel insurance with their purchases.

But as a practical matter, these shenanigans are difficult to stamp out, because they can rear their ugly head anytime.

Setting up an opt-in or opt-out is as easy as a click or two on the part of the business.

Until there’s a law against it, mind your boxes.

Christopher Elliott is a consumer advocate who blogs about getting better customer service at On Your Side. Connect with him on Twitter and Facebook or send him your questions by email.


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