Visa Canada has released its second annual Deceptive Marketing Survey, revealing that 21 per cent of Canadian credit card holders have been the victim of unauthorized charges resulting from an offer they accepted online or over the phone.
Visa conducted its national survey of more than a thousand Canadians to gauge awareness and educate consumers about the dangers of deceptive marketing practices, which typically involve hidden clauses in offers or terms that are not well disclosed resulting in recurring payments or additional fees. Although 79 per cent of respondents from the Prairie Provinces claim to be aware of deceptive marketing, the percentage of cardholders being victimized is worryingly high.
This survey of 1,009 Canadians was conducted by Ipsos Reid between August 22, 2011 and August 26, 2011. A survey with an unweighted probability sample of this size and a 100% response rate would have an estimated margin of error of +/-3.1 percentage points 19 times out of 20. Margin of error for subgroups will be larger. All sample surveys and polls may be subject to other sources of error, including, but not limited to coverage error, and measurement error.
“It’s critical to stay observant when making purchases over the phone or Internet,” said Gord Jamieson, Head of Payment System Risk, Visa Canada. “Although the majority of retailers are legitimate and trustworthy, it’s vital that consumers review the terms and conditions of an offer before they commit to buy – remembering the adage that if it seems too good to be true, it probably is.
Fraudsters target consumers in a myriad of ways, such as by burying terms and conditions that bind consumers to ongoing payments, hiding clauses that make cancellations or returns difficult, and pre-checking consent boxes, creating a negative option billing feature, whereby consumers who do not actively opt-out of an offer are automatically charged for it.
Unfortunately, only one quarter of online shoppers polled read the entire terms and conditions of sale before making a purchase, while 48 per cent read only a portion, and a shocking 27 per cent read nothing at all. Online shoppers in Quebec were the most at risk, with 40 per cent claiming to not read the terms and conditions of sale.
“On a positive note, the survey revealed that nearly all credit card holders, including 97 per cent of respondents from the Prairies, review their credit card statements at the end of the month for unauthorized charges,” said Jamieson. “This is very good news, as reviewing statements is one of the most effective and easiest ways for cardholders to monitor their accounts and take action on suspicious activity.”
According to the Canadian Anti-Fraud Centre, staying ahead of marketing scams requires consumer vigilance, even when not actively shopping. “Fortunately, it’s fairly easy for consumers to get into the habit of recognizing and preventing fraud, simply by adhering to common sense tips for safe shopping,” said Paul Proulx, RCMP Staff Sergeant in charge of the Canadian Anti-Fraud Centre. “When shopping online, always read the fine print before committing to buy and don’t be afraid to ask the merchant for more information if something seems confusing or murky. Never, ever provide financial or other personal information over to phone or via email, and remember to review your monthly credit card statement for suspicious or unfamiliar charges.”
Visa offers consumers the following tips to help become a savvy shopper, and to avoid being a victim of deceptive marketing practices:
- Take time to read and understand all merchant terms and conditions ensuring a free trial doesn’t turn into a costly purchase you didn’t intend to make.
- Check web sites for merchant’s delivery and return policy before you commit to buy.
- Look for any pre-checked boxes before submitting your payment. Failing to un-check the boxes may bind you to terms and conditions you’re not interested in.
- Every month, do a careful review of your card statements to make sure you are in “the-know” about all charges on your cards, and notify the card issuer promptly of any unusual activity or unauthorized charges.
- Try to resolve the situation with the merchant. If you’re unsuccessful, contact your Visa-issuing financial institution immediately to dispute the charge.
- Choose cards that offer extended security designed for card-not-present situations. Visa’s E-Promise assures cardholders that if they have tried and have been unsuccessful in resolving a dispute with an online or phone order merchant, they can contact their Visa card issuer directly to help resolve the credit card charge in question.
- Report your experience to the Canadian Anti-Fraud Centre by calling 1-888-495-8501 or emailing email@example.com.
Should fraud occur, Visa cardholders can have peace of mind knowing that under the Visa Zero Liability policy, they will not be liable for unauthorized use of their card if their card is lost, stolen, or if their card number is used fraudulently. Visa cardholders must establish that the transaction is not their responsibility as per all applicable agreements of the issuing financial institution. Visa Purchasing, Visa Corporate, and Visa Commercial cards are excluded from the program.