|by Jason Steele|
I recently received a letter in the mail with a return address of “Processing Center” at a PO Box in Nashville, Tennessee, yet the postage was paid from Hartford, Connecticut. On the outside of the letter, I was informed of a “CHECK ENCLOSED”. Those two oddities raised enough flags that many savvy consumers would have thrown the letter away. Why would anyone write on the outside of the envelope that it contains a check? Curiosity got the better of me when I received this letter last week, so I opened it up to find a what appeared to be a check for $8.25.
Wait For It….
Beneath the amount was a statement saying “By cashing or depositing this check you are purchasing membership in Just for Me.” This is the point where any sensible person would throw this away, yet as your trusted consumer advocate, I decided to dig a little further. I inferred from the term “membership” that someone would be billing me for something monthly for the rest of my life on the hope that I would never notice it. In the industry, this is called “negative option” billing. The question I had was how were they going to charge me? I’ll get to that later.
What Is “Just For Me”?
“Just For Me” is a “membership club” owned by Trilegiant Corporation, part of the Affinion Group. Trilegiant was part of Cendant Corporation, which then changed their name to the “Avis Budget” group. Later, Cendant/Avis Budget was separated into four different companies. This is just a brief summary of what is a far more complicated story than what I am able to describe in this space. It should come as no surprise that the “Just for Me” club is of dubious value to say the least. According to their web site, for your $12.99 a month, you get 10% off Restaurant.com certificates. I happen to like Restaurant.com, and by signing up for their promotions by email, I regularly receive offers for 60-90% off their certificates. Even at %10 off, one would have to over a dozen certificates a month, which normally cost $10, to break even on this “club”.
The offer on the back of the “check” I received in the mail also described getting “2% cash back on credit card purchases”. Of course it is only on the 1st $5,000 spent in a year, so we are talking about $100 a year for your $167.88 in monthly fees during your first year. I could go on, but all of their offers are of similar value.
Budget Rent A Car Is The Culprit
Printed on the back of the “check” is the following:
“I understand that the $13.99 monthly fee will be automatically charged to the credit card I have on file with Budget [emphasis mine] unless I cancel my membership by calling 1-877-658-9097 before the end off the trial period. I understand that after my first year I will be charged $14.99 a month for the next twelve months an d I will also be charged every month thereafter at the then current monthly fee, unless I call to cancel and owe nothing further. “
This is a textbook “negative option” scam, that is being abetted by Budget rent a car. The last time I had used Budget was on a trip to Milwaukee last July. At no time did I authorize them to keep my credit card on file so that they could solicit me with scams like this. I do not belong to Budget’s frequent renter program, and I am not a member of any corporate account.
I contacted Budget Rent A Car multiple times, via their media inquiries telephone number and an email in which I asked them:
1. At what point did I authorize Budget to use my credit card for this purpose?
2. Are you aware of the many, many, legal problems that Trilegiant has experienced. Here are a small fraction of the examples that can be easily found:
3. What is the relationship between Budget and Trilegiant?
4. How does this relationship meet your company’s stated values:
A deep pride in who we are and how we work:
* We always keep the highest personal standards of integrity and honesty.
Budget had no comment, other than to refer me to Trilegiant.
So How Is This Legal?
If it were perfectly legal, I doubt Triligent would have such a checkered past, as you can see by the links I included in my email to Budget. A simple Google search turns up no shortage of negative opinions about Trilegiant. I have reported that Visa has cracked down on these types of scams. The UpgradeTravelBetter blog also had an article about this particular scam.
The fact is that this scam is going on because neither the government , or the credit card companies, have stepped in, yet. In the mean time, the blame falls on both Budget as well as my credit card company for allowing them to operate in such an unscrupulous manner. I rented a car from Budget over six months ago and my credit card information should have been erased shortly after I returned it.
I think I have a few questions for my credit card company at this point as to whether this practice violates their terms of service with Budget.
Go To Part Two Of The Series: More on Negative Option Billing and Pre-Acquired Account Marketing