I am taking a short break from my series uncovering the Budget/Trilegian scam, while I revel in my US Airways Dividend Miles haul and follow up with my credit card company as to why they permit this scam.

In the mean time, here are a couple other nefarious practices that are coming up on the regulatory radar.

States Looking To Curb Use Of Credit Score In Hiring

When you loose you job and are falling behind on your bills, the last thing you need to hear is that a potential employer wants to run a credit check on you before your are hired.    Or as Wisconsin state Rep. Kim Hixson said, “If somebody is trying to get a job as a truck driver or a trainer in a gym, what does your credit history have to do with your ability to do that job?”, according to this article in the Associated Press.

I couldn’t agree more.  I find the practice of using credit reports for any purpose other than obtaining a loan abhorrent.    The trend in using credit checks in hiring and insurance, if left unchecked, may spread to just about everything.    Can anyone tell me what is keeping colleges from checking credit scores, or just about anyone else these days?    Do we really want a permanent underclass of people who can’t pay their bills or get a job?

FreeCreditReport.com Has Six Months To Straighten Up It’s Advertising

According to this article in the Huffington Post, Experian, the owners of FreeCreditReport.com have until September to fix their advertising program, whichm while creative,  is notoriously short on details as to how much the “free” credit report will cost you.     The answer is $14.95 a month, if you don’t cancel it within 14 days.    This is textbook negative option billing, part of the Budget Trilegiant scam that I have been working on.

MrCreditCard himself reviewed the service here recently, concluding “would I sign up for such a service? To be honest probably not.”    I would encourage you to take a look at all of his recent reviews of credit card monitoring services.

Back in December, I told you about the US Airways promotion, and how you could fly in First Class for very cheap.     If you took advantage of the promotion, today is the day the miles were to hit your accounts.

With nervous anticipation, I checked by account throughout the day, until I saw the above balance.   As you stare at that balance keep in mind two things:

1. I just opened my US Airways account in December.

2. I have never flown on US Airways.

How Did It Work Out?

Yes, I did spend $3,000 on the TrackItBack product to get those miles, but I donated the product to charity and will take a tax deduction.    Conservatively, you could say my net out of pocket expenses were $2,250, or about a half a cent per mile.

If you consult the US Airways Star Alliance Award Chart, you will see that it is the equivalent of buying a First Class Ticket to Europe for $600 dollars!

In fact, my friend Shawn and his mother, who I wrote about in the original story, have already found their two tickets to France in First Class to the Tour de France this year using their miles.    They put a hold on them over the weekend, and purchased them today.     The taxes and fees were close to two hundred dollars each, but think about it:  They will be flying to Europe on United Airlines International First Class and returning on Lufthansa’s outstanding First Class for about $2,000 total for the both of them.   That compares to about $3,500 for the two tickets in the peak summer season, when priced in coach.

For comparison, the round trip from Denver to Paris on Lufthansa in First prices out at over $17,000,  while the lesser United Airlines International First product is somewhat under $10,000.

How Did I Find The Award Seats In First?

You will recall that I had speculated that “there is that oh so tempting chance that they might do the trip in business class or even first, but it is hard to say considering they will only be able to book their July trip in March.”  Considering July is definitely the high season for reward travel to Europe, finding space for them was a challenge.   Luckily, I had studied the system and found that there are some tools out there to help you.

You cannot book US Airways international partner awards online, you must call their representatives.   While their representatives have a reputation for being friendly, they are not known as being familiar with all of the different possible routings in the Star Alliance, nor are they encouraged to spend much time looking on your behalf.

Fortunately, All Nippon airlines of Japan has a website that shows award availability within the Star Alliance, so I signed up for a membership in their frequent flier club and did the searching myself.   I completely lucked out when I found two award seats in First Class on a United flight from Denver to London, nonstop.   From London, they will take a discount carrier on to Bordeaux where they will see a couple stages of the tour.

Returning from Paris, I found plenty of space on Lufthansa to Frankfurt, in business class, but getting them back to the states was much more difficult.    I had to find an available flight transatlantic, and since there was no space on their Frankfurt-Denver flight, I would also have to find them space on United or Continental from their point of entry to Denver.    In the end, I found them seats in First on a 747 from Frankfurt to Houston, and continuing in First to Denver on United with good connection times.

Once I found the flights with space, they were able to call up and ask for a reservation on the specific flights they knew were available.   It was a win-win as the representative’s work in finding the flight was already done.

In Conclusion

A savvy traveler and credit card user can get to their destination in First Class for less than the cost of coach.    To do so, you have to wait until the right promotion comes along, and then go all in.    The key is having knowledge of the deal when it appears, and acting on it within the promotion guidelines.    In my experience, these promotions come up infrequently, but there will be others in the future.

Read this blog and others and you will be in the loop when the next big promo comes around.

Perhaps this is the most famous of all credit monitoring service of all. It appears on TV and cable with that famous guy and the song telling us how his credit got ruined. But nothing has irked many consumers advocates more because the website is registered as freecreditreport.com, but it’s credit monitoring service is actually not free. But that aside, how good is this service? Let’s find out.

Basic Monitoring Service – FreeCreditReport.com from Experian provides basic credit monitoring service. It monitors your credit report from the three main credit bureaus and gives you alerts if there are any changes. It also has tools to tell you when is the best time to apply for credit.

Free Credit Score – To be honest, basic credit monitoring service is such a commodity now that I’m more interested if a company claims to let you monitor your credit score. But what score do you get? Most run of the mill credit monitoring service offer you a score that is derived from their own proprietary models and not the FICO score (because FICO does not want to sell it to them!). But this is Experian. So what do we get?

Unfortunately, the credit score that you get is not the FICO score (in fact, you can’t really get Experian’s FICO score any more). What you get instead is the PLUS score, which is a proprietary score that as Experian admits, “is not sold to lenders”! So while the score may approximate your FICO score, it is not the score that lenders see. Which kind of makes it useless in my opinion!

Assistance if your ID is stolen – freecreditreport.com also provides help and assistance if your ID is ever stolen.

Fees and Free Trial – If you sign up for this service, you will be given a 7 day free trial. But experian says that while it is a snap to get your Experian credit report, it may take up to 4 days to get your credit reports from TransUnion and Equifax and in fact, you may not get them during your free trial. Thereafter, you will be billed $14.95 a month if you do not cancel the service.

Website Ease of Use – As part of this review, I had to figure out which credit score do they actually give you. And they do not actually tell you right off the bat. In fact, I had to put in a bogus name and email to get to the second page where there was a terms and conditions button! That was where I got the necessary details. Below are screenshots.

Verdict – Lots of folks have signed up with this service and it is a very profitable one for Experian! But would I sign up for such a service? To be honest probably not. I think in terms of credit monitoring, it does not really matter which service you sign up for. They are all mostly the same. But if I were to pay a monthly fee, I would at least like to know my FICO score and not any other score. From this perspective, I would rather go with a myFICO service as they give you the real FICO score from either Equifax or TransUnion. You can either get the FICO® Quarterly Monitoring, which monitors your TransUnion score for only $4.95 a month or the FICO Standard, which a a one-time purchase of either you TransUnion or Equifax score.

As part of our “credit monitoring review” series, we are going to review safecreditscore.com (and boy do we have a surprise at the end!).

Basic Credit Monitoring Service – Safecreditscore.com offering a basic credit monitoring service where you get access to your credit reports and you get credit monitoring services which alerts you to any changes to your credit report.

Access to Credit Scores – The service even says you can access your credit score. But which credit score? That was what I was interested in finding out.

My Investigation into the type of credit scores you get – This, to me at least, is very important because so many services offering scores that are not actually FICO scores! So I did what I had to do and filled in some bogus name and email address on the page. It took me to a second page where I had to fill in an address. So I found the address of a hotel in the zip code that I had entered and it took me to the final page where I had to fill in my social security number and credit card number. I expected to find a phone number but I could not! But through filling in the forms and clicking on a few links, I discovered that offering is actually owned by the same folks from gofreecredit.com and creditreporting.com! But still I had no phone numbers and hence I can’t even tell you what sort of scores they are providing.

Fees – You get a “7 day free trial” and thereafter will be billed $14.95 for the service.

Opinion and Verdict – I recommend you do not even get this service. Firstly, you can always get your credit report for free. Even if you want to get a credit monitoring service, this one does not come with any phone numbers in case you want to cancel. Just stay clear!

GoFreeCredit.com is a credit monitoring service provided by Privacy Matters. In this review, I will slice and dice this service and even have a very funny story to tell. Read on!

Another Credit Monitoring Service? – GoFreeCredit.com is really another credit monitoring service. You obviously get your credit reports every month and a credit score. The reason anyone wants to get such monitoring service is that you will be alerted if there are any changes to your credit reports.

What type of score do you get – In addition to getting your credit reports and having it monitored, you will also get your “credit score”, or so they claim. But exactly, what credit score? I tried to find out. But nowhere on the site was there any phone number to call. So I decided to enter a bogus email address bullshit@yahoo.com into the form and it took me to another page where there were more details about the fees and the terms and conditions. (See screenshot below).

The Phone Call – I managed to reach a customer service rep who sounded like they did not come from this country! (sounded Mexican). I asked her what sort of score do I get. She did not understand at all. So I had to explain to her that you can either get the FICO score, Vantage Score or a score that is developed by themselves. She put me on hold and spoke to a supervisor. She came back and told me that we will get a “score” that is given by all three bureaus. But it is not three scores, but just one score (so it could potentially be a Vantage score since they claim it should be the same across the board). But she did not know, and I could not be bothered to probe further cos I suspect it will get me nowhere.

Fees – You are given a 7-day “free trial” and if you choose to continue the service, you will be billed $29.95 a month. In addition, you will be billed an extra $2 a month for a membership to a “savings club”, which is absolutely ridiculous and a blatant upsell. You actually have to call a toll free number to opt-out of this “savings club” membership!

Verdict and Opinion – Let’s face it, $29.95 a month is an expensive fee to pay a month to get access to your credit report when you can get it free once a year and furthermore, you do not even get your FICO scores! And they even automatically enroll you in some savings club! Avoid this deal. Most of the better ID theft protection services provide the same service for much cheaper (about $15 a month) with much more benefits. This is simply an overpriced offering!

Part Three of my investigation into the Budget Trilegiant Scam

In part one, I told you about the solicitation I received, in the form of a check, from Trilegiant, to join a specious “membership club” in which they would charge my credit card “on file with Budget”.     In part two, we learned more about Negative Option Billing and Preaquired Account Marketing.    Since then, I have been trying to verify which credit card Budget has on file for me.

No Comment From Budget’s PR

When I turned to Budget’s public relations people, they had no comment, other to refer me to Trilegiant.     I know Trilegiant is a scam, I found that out in a .23 seconds on Google.   I wanted to know what part Budget has in this scam and how my credit card company may be complicit in this.

Budget Customer Service Has No Clue What’s Going On

A key ingredient in any corporate scam is keeping your customer representatives in the dark.   Budget seems to have this act down to a science.   I made five calls to Budget’s customer service number trying to find out which of my credit cards Budget “has on file” and was willing to provide to Trilegiant/Affinion.    On three of the calls, I was forwarded to Trilegiant.   The first of those calls was disconnected.   On the second call, I reached Trilegiant, but I could not speak to their customer service department without a “membership number.”   On the third attempt, I reached a human in the sales department who informed me that they could not tell me which credit card they had on file.   My fourth call to Budget’s customer service line was met with someone who attempted to transfer me to “a data center in Virginia.”   That call was disconnected.

My fifth call to Budget resulted in an astonished response that Budget would not have my credit card info unless I was a corporate customer or part of their frequent renter program, which I am not.    The representative seemed equally confused as to why I would receive a solicitation claiming to charge the credit card that I had “on file with Budget”.

Which Card Do They Have “On File”?

When pressed, each representative told me that the card must be the last one I had used.    Since I haven’t rented with Budget much lately, I know exactly which card was used, and I am currently corresponding with the card company.     I would like to give them ample time to investigate this matter before I discuss exactly which one it is.    My impression is that such “sharing” of customer’s credit card information for an unrelated activity with a (likely fraudulent) third party is against their merchant agreement, and the company in question has agreed to investigate this.

Why I Am Digging So Hard?

I will refer back to the Harvard study:

Almost all of the consumers paying for the services sold through preacquired account marketing are unaware their accounts have been charged and unaware they have “purchased” the service.

Many of these consumers are charged because they have diminished mental capacity or struggle with the English language.Preacquired account marketing works only because it singles out consumers who do not understand the solicitation or who do not notice the account charge….

When I mentioned this investigation to my wife, she told me that her parents had become victims of a similar scam.   Every month, they find a mysterious charge on their credit card.   Every month they call their bank and have to have it disputed.    Every month it reappears.

My wife and her family were born in a central Asian republic that was part of the former Soviet Union.  Although they speak several languages, her parents have not yet mastered English since moving to the United States.    Nevertheless, I have never met such honest and hard working people who are now proud American citizens.   They, and others like them, are the target of of these scammers.     Other targets include senior citizens and people with cognitive disabilities.

These companies are preying on our most vulnerable citizens and I want them to stop.   I might not force them to stop, but I will certainly do my part to let the world know who they are and what they are doing.

The series continues with Part 4, The Sad Truth About The Budget Trilegiant Scam.

This is another review in our “credit monitoring review series”. Today, we will review this service from Credit Report Online Instantly (what a name!).

What does this service provide? – Well essentially, this service offers basic credit monitoring service that alerts you if there are any changes in your credit reports (you can obviously access your credit reports). In addition, they provide this things called “credit wizard”, that shows you how to increase your credit score (but you will not get any score BTW). To entice you to try their service, they are offering a $25 gift card!

Monitoring of public database – This service also provides public database monitoring to help spot any potential ID theft that has already occurred.

Fees – So how much will it cost to monitoring cost? $34.99 a month! You are given a five day trial and if you do not cancel, then you will be billed monthly at this rate.

Verdict and Opinion – I’ll be blunt. Avoid this deal! It is overpriced for a credit monitoring service and it does not even give you your credit scores! Most other credit monitoring service or ID theft protection services charge about $15 a month and they provide a lot more benefits than this. AVOID this at all cost.

Yesterday, I wrote about how Budget Rent A Car is giving your credit card information to scammers. I have been looking into this subject and found some interesting information.   By far, the most comprehensive analysis I could find was from the Harvard Journal on Legislation titled, “The Invisible Hand of Preacquired Account Marketing,” by Prentiss Cox.

It is a 45 page report, which is to be expected from a scholarly publication, but here are some of the highlights:

What Is Preaquired Account Marketing?

Preacquired account marketing is a sales practice that allows companies to charge consumers for services they do not know they ordered and do not use. The practice depends on a seller’s ability to access a consumer’s financial account without the consumer providing the account number to that seller. This is possible because the seller has paid a financial institution, or another seller who retains consumer account numbers, for the right to charge those accounts.

Who Do They Prey On?

Almost all of the consumers paying for the services sold through preacquired account marketing are unaware their accounts have been charged and unaware they have “purchased” the service.  Many of these consumers are charged because they have diminished mental capacity or struggle with the English language.  Preacquired account marketing works only because it singles out consumers who do not understand the solicitation or who do not notice the account charge….

What Products Are “Sold”?

…The product most commonly sold through preacquired marketing is a membership club. For example, preacquired sellers market home decorating clubs that provide discounts on furniture and programs sold as helping to prevent identity theft.  Preacquired sellers also frequently sell insurance policies and magazine subscriptions.

Conclusion

Preacquired marketing works like an invisible hand. Not the sort that magically aligns buyers and sellers in equilibrium to promote maximum wealth. Rather, an invisible hand that selectively reaches into the pockets of consumers. These are not petty acts. Preacquired sellers are sizable companies who charge tens of millions of consumer accounts for billions of dollars in concert with some of the nation’s largest financial institutions and sellers of goods or services.

Preacquired account marketing should be banned. That it has not yet been prohibited in any form is consistent with a pervasive aversion in the last few decades to government rules that prohibit the use of sales practices or the sale of products. It is time to revisit, or at least qualify, the basis for that aversion in the context of this peculiarly deceptive form of marketing.

My Thoughts

If this sounds a lot like like the Budget Trilegiant scam, it is no coincidence.    In fact, this document refers repeatedly to Budget and Trilegiant.     Essentially, they are combining negative option billing with preaquired account marketing and a little phony check action thrown in to the equation to reach new heights of deceptive practices.

What Am I Doing?

As a consumer advocate, I am currently pressing my credit card company to find out why they have been permitting Budget to use my credit card information in this way.   I thought such “sharing” of my account information would be against their terms of service, and if not, it should be.   I will let you know their response as soon as I receive one.

What Can You Do?

1. Always scrutinize your credit card statements. If you are like me, you charge everything to your card in order to maximize reward points.     The downside is that it is easy to receive a statement that is several pages long, filled mostly with smaller transactions.

2. If you notice something unusual, investigate.     Don’t assume everything you don’t recognize is fraudulent.   Sometimes a legitimate charge shows up with a merchant name that you don’t recognize, especially when you make purchases over the Internet.   Google the merchant name and see if you remember the charge.    If you are still coming up blank, try calling them and asking about your purchase.    They should be able to tell you what you bought and when.

3. If the story doesn’t check out, make one attempt to get a refund. Don’t spend all day on hold, don’t put up with the run around, and don’t jump through hoops.    If the company is not a scammer, they should pick up the phone in a reasonable amount of time, say less than 15 minutes.    Then, they should quickly reverse all of the charges.    Many scammers are “soft scammers” that are hoping you don’t call, but will quickly reverse the charge when you do to stay off of the credit card processor’s radar.

4. Contact your bank and ask for a chargeback. Unfortunately, not all scammers are “soft scammers”.     Some are “hard scammers” and will make life difficult for anyone who tries to get a refund.  Don’t play their game, just go straight to your trump card, a credit card chargeback.   The burdenf is on the merchant to prove that you authorized the charge.     Tell your credit company that you did not authorize the charge, and they should remove all charges from that merchant quickly.

5. Make sure all charges are reversed It is likely that you may have been charged many times by the same merchant.  Remember to ask you bank to tell you of any instances of this merchant charging your credit card.   Any action you take should be against all charges the scammer issued.

And whatever you do, don’t cash that “check”!

Go To Part Three of the series: Budget Has No Clue Which Credit Card They Are Giving Out To Scammers

The series continues with Part 4, The Sad Truth About The Budget Trilegiant Scam.

This is going to be a very short review of CreditReporting.com. Most “credit monitoring service” requires you to pay a monthly fee to be able to see your credit reports all the time and perhaps throw in a credit score from just one bureau. Or a couple of services offer credit monitoring services and give you “all three credit scores”, but only that they are Vantage score and not your FICO score! Many folks simply want their credit scores before they apply for a mortgage or a car loan, but do not want to pay for these “credit monitoring services” since you are entitled to a free credit report every year anyway. They simple want to know their credit scores.

Well, creditreporting.com offers such a service. For a price of $34.90, you get a copy of your credit report. This alone really is not attractive since you can get it for free. But for an additional $9.95, you get your three credit scores. So what you are really paying for is your three scores, which is what most folks want to know.

So for a grand total of $44.85, you get

And that’s it. No monthly fees or any of those recurring bills.

But is the credit score the FICO score? – Turns out the answer is NO. I called their toll-free number and the customer rep explained to me that they could not get hold of FICO’s proprietary score and they score that is get is developed by them and it approximates the FICO score.

Verdict and Opinion – The problem with most credit monitoring service is that they charge you a monthly fee and provide with just a couple of credit scores from either one or two of the credit bureaus. But not many folks want to pay for these monthly recurring bills. CreditReporting.com is one of the few that offers you “credit scores that should approximate your FICO score” from all three credit bureaus. They are not exactly the FICO score. But for those who just wish to know approximately where they stand without paying monthly recurring fees, this may not be such a bad choice.

If you insist on getting an actually FICO score, then the FICO Standard is a better choice as you can purchase a credit report with the actual FICO score from either TransUnion or Equifax.

Note: This Is Part One in a Series.   You can read Part Two here, and Part Three here.  The series continues with Part 4, The Sad Truth About The Budget Trilegiant Scam.

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 buy 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:

Chase Bank, Triligent, Settle Negative Option Fraud Charges
Deceptive Marketing Victimized Tens of Thousands of Californians
Class Action Lawsuit Against Trilegiant Corporation

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