Sep 24 , 2010

One in five Canadian consumers victimized by deceptive marketing, Visa says

By Robin Arnfield, News Editor

A survey conducted on behalf of Visa Canada has found that, despite being aware of misleading marketing practices, Canadian consumers are still falling prey to deceitful behaviour.

The survey of 1,013 Canadians was conducted by Ipsos Reid between July 8, 2010 and July 15, 2010. It found that 20 percent of credit cardholders have been a victim of unauthorized charges on their credit card as a result of an offer they accepted online or over the phone.

Yet the poll also discovered that nearly eight in ten Canadians (78 percent) are aware that such practices exist.

Gord Jamieson, Head of Payment System Risk, Visa Canada, told Payments Business that there is a risk of deceptive marketing, when people sign up online or over the phone for a free trial of a product or service, and disclose their credit card information. “What consumers often don’t do is to read the fine print in the terms and conditions,” he says. “Buried in the terms and conditions may well be a clause that says that, unless notified, the merchant will regularly bill the customer’s credit card. So what happens is that after the free trial is over, the consumer omits to inform the merchant that they don’t want to continue, and they start getting charged on their credit card.”

According to Jamieson, deceptive marketing practices come in many forms. For example, on a merchant’s website, a consent box may be pre-checked, and unless the consumer unchecks the box, they are effectively agreeing to their card being charged. Other deceptive practices include burying the details of the offers in the terms and conditions and making cancellations or returns difficult.

“Once victimized, consumers can be caught in a cycle of recurring charges for products and services they don’t want,” Jamieson says. “However, once they have tried and failed to get their money back from the merchant, they just need to complain to their issuer, and set in place a chargeback mechanism.”

Visa stresses that this chargeback program only refers to consumer credit cards.

“As part of a global Visa program, Visa Canada is working with issuers to inform them about the prevalence of deceptive marketing practices, so that they can respond sympathetically to complaints from consumers requesting chargebacks,” Jamieson says. “We are also monitoring very closely to see which merchants have excessive chargeback levels,” he adds. “Once dishonest merchants have been identified, Visa works with acquirers to remove their card-acceptance agreements.”





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