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Published:August 1st, 2013 11:40 EST
Report: Americans Hit with $14 Billion in Grey Charges on Credit and Debit Cards

Report: Americans Hit with $14 Billion in Grey Charges on Credit and Debit Cards

By SOP newswire2

BillGuard, a leading personal finance protection company, today delivered a landmark industry report revealing that American cardholders paid $14.3 billion in deceptive Grey Charges in 2012. The report also explores the impact on US card issuers, totaling their losses at $562 million.

BillGuard retained Aite Group, a leading research and advisory firm with expertise in financial services, to conduct the study to examine the grey charge problem among US debit and credit cardholders and the service cost impact on card issuers.

The report reveals 11 types of deceptive and unwanted credit and debit card charges known as grey charges ", that occur as a result of misleading sales and billing practices that are not properly disclosed to consumers. At 115 million transactions and $6 billion in charges - the most prominent type of grey charge is free-to-paid ". An example is when a consumer receives a good or service for a free trial period and then is automatically charged a fee if they do not cancel or return the good or service within a given timeframe. Aite Group`s analysis shows that it is in the issuers` best interest " economically and ethically "to help cardholders monitor and avoid grey charges.

Over the past 2 years we`ve amassed a powerful dataset of consumer knowledge on nearly a billion credit and debit card transactions, " said Yaron Samid, founder and CEO of BillGuard. This data has quantified what most of us intuitively know to be true; merchants profit greatly, at the expense of cardholders, when we don`t check our bills. Capitalism drives revenue optimizations and churn reduction techniques, but improper disclosure of sales and billing terms crosses a red line of ethics. Now that anyone with a smartphone can charge your credit cards, the problem has become an epidemic. Today we`re taking important steps to fight back by educating consumers and financial service providers, and equipping cardholders with a breakthrough tool for finding and resolving grey charges; the new BillGuard iPhone app. "

The free app intelligently prioritizes noteworthy, recent and recurring charges across all of a cardholder`s credit and debit cards. It`s like a Smart Inbox for your money, " said Samid. The app uses crowdsourced analytics from BillGuard`s national Transaction Intelligence NetworkTM to help users quickly spot and recognize charges deemed questionable by other cardholders on their cards. As users archive verified charges and trusted merchants with a single finger-swipe, BillGuard gets smarter, customizing their priority list with the charges they want to review. To handle billing inquiries and disputes BillGuard completely bypasses the costly and inefficient chargeback networks to connect cardholders directly to merchants for free, expedited resolution. It`s a classic win-win-win for consumers, merchants and banks. "

Monitoring "and preventing "grey charges would be beneficial to both consumers and banks, " said Ron Shevlin, Senior Analyst at research and advisory firm Aite Group. By using technology and tools like BillGuard, cardholders stand to save up to US$7 billionin charges, and card issuers could reduce customer service costs by hundreds of millions of dollars. "