Don't cash that check! It's a scam

Capano, who is a bit hard on himself, told me he was “a complete idiot” for depositing the check. But he figured since he never gave the company his credit card number, there was no account for them to charge. Capano didn’t realize that since Trilegiant was working with Household Bank, they already had his credit card number.

“It’s extremely misleading,” he says. After complaining, Capano was able to get a refund of $66. He’s still out $33 for a service he never used.

When Capano got a second “surprise” check for $5 from Direct Merchants Bank, offering him a free trial in the Great Fun money-saving program, he knew not to take the bait.

The banks respond
HSBC owns both Household Bank and Direct Merchants Bank. HSBC spokesman Stephen Cohen said customers should not be surprised by a charge on their credit card. He says the bank works “diligently” with all of its partners “to ensure language on those marketing offers clearly discloses terms and costs associated with them.” If a customer cancels after the trial period expires, Cohen says, they will get a pro-rated refund.

I contacted Chase, but the bank’s communications department told me they do not comment on litigation.

I wanted to talk to someone from Trilegiant. I called and faxed them but never heard from anyone.

BBB flooded with complaints
The Better Business Bureau of Connecticut has received 309 complaints about Trilegiant in the last three years. The bureau gives the company an unsatisfactory rating “due to unanswered complaints and a pattern of complaints concerning deceptive selling practices, unauthorized charges to consumer’s credit cards and non-cancellation of memberships following cancellation requests.”

Paulette Hotton, president of the Better Business Bureau of Connecticut, has seen the checks people are getting. She says the terms of the deal are printed too small. “People don’t realize they are there,” she says. “They don’t see them or don’t read them. They see this check and they go cash it.”

Even if people do realize that by cashing the check they are making a purchase, Hotton says, they often forget to cancel within the 30-day period. They’re never given a notice that the trial period is about to end.

Florida sues and settles
In March of 2005, Trilegiant settled a lawsuit filed by the Florida Attorney General. The company did not admit doing anything wrong, but it did agree to pay Florida $400,000 in restitution and to make refunds to customers who had complained.

Lessons learned
I think it’s clear that these free checks used to push “risk-free” trials can be very risky and costly. Ask yourself, for $5 or $10, is it really worth the hassle of dealing with an unwanted charge if you forget to cancel in time or if you are erroneously billed? People who have been burned by these deals say it’s often difficult or impossible to cancel without being billed.

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