By Eileen A.J. Connelly, AP Personal Finance Writer

NEW YORK (AP) — Visa Inc. has cut off 100 scammers who use bogus marketing techniques to dupe consumers in the past six months.
Among the most common hustles: billing the credit cards of customers who thought they were getting free trial products like dietary supplements or teeth whiteners $79.95 per month or more, and then making them jump through hurdles to get the charges to stop.

"We've been monitoring this situation from this past summer in particular," said William M. Sheedy, a Visa group president. The number of complaints from cardholders who disputed ongoing charges they never agreed to shot up, although the merchants and the products they sold often varied.

While there are always a handful of complaints about merchants, most are resolved quickly. But in the case of the ongoing charges, it was clear the problem was widespread. "Consumers are being fleeced," Sheedy said.

Visa told The Associated Press that about 100 merchants had their payment processing terminated because of chronic complaints since early summer. The scam is so common, the San Francisco payment processor is teaming up with the Federal Trade Commission and the Better Business Bureau to alert consumers.

Most of the time, the swindlers use Internet ads to lure their customers. The ads often feature unauthorized photos of celebrities like Oprah Winfrey and Rachel Ray, implying endorsements for supplements like acai berries or teeth whiteners.

Newer variations take advantage of the recession with work-at-home scams, or con people into seeking information about applying for government grants linked to economic stimulus programs.

Winfrey and her frequent guest Dr. Mehmet Oz filed several lawsuits this year trying to stop companies from implying they endorsed products made with acai berries.

"The fraud artists look for the fraud du jour and they will play that up magnificently," said Lois Greisman, an associate director of the FTC.
Other common features on the deceptive ads are fake testimonials and credit for the discovery of breakthrough products to a "local mom," said Stephen Salter, vice president of BBB Online. When someone clicks on the ad, their computer's location triggers a program that sets the origin of the "local" mom near that user.

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Here's how it works: consumers click on an ad for a free trial offer of supplements or a free "information kit" that will explain how to apply for government grants or use the Internet to make big money effortlessly from home. They think they're entering a credit card number to pay for shipping and handling. But in a few clicks, they've unwittingly authorized ongoing charges that can rack up fast. When consumers see their statements and try to question the charges, they are often unable to track anyone down to make them stop. Often, clicking through can result in more than one monthly charge on a card.

"The game here is to get people hooked, keep them on the hook for monthly charges as long as you can, and only stop making those charges when you're forced to," said Stephen Salter, vice president of BBB Online. BBB has received thousands of complaints about the problem, with multiple companies to blame. "The product is irrelevant to getting the charges on the card."

The trick is a marketing technique called "negative option," where customers must say they don't want to join a so-called club or receive additional materials in the future. The details of the ongoing charges are often in small print or can only be found by following a hyperlink. There's frequently a series of pre-checked boxes that most consumers zoom past as they order. Skipping those boxes is key, because leaving them checked ostensibly giving the companies permission to keep charging the card.

"I can't count the number of sites online that are engaged in this type of advertising, and even if I could count them today, that number could easily change tomorrow," said Greisman of the FTC. The Internet has given "new life and new breath" to this type of scam, which the agency has also seen in the past with direct mail, telemarketing and even television ads.

It's impossible to track how many people have been caught up in the scams or how many companies are involved.

Negative option marketing is not illegal. It's the hidden manner some companies use to get people to agree to the charges that is the problem. "Those cost disclosures have to be upfront and prominent," Greisman said.

Before making a purchase, consumers should check the company out on the BBB Web site,, to see if it has racked up complaints. Consumers who've been caught up in the scams should file complaints with the FTC online at or by phone at 1-877-FTC-HELP.

Copyright 2009 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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