After his mother was diagnosed with a mild cognitive impairment, Craig DeLue started checking her finances.
The northern California resident was puzzled by a $12.99 charge deducted from her bank account for something called Bank of America Privacy Assist. “She had no idea what it was,” her son said.
The mystery only grew when he Googled the name and found that Privacy Assist, a credit monitoring service, was part of a $727 million regulatory crackdown at Bank of America for deceptive marketing in 2014.
“She’s got a lot of money with them – CDs, checking – she’s banked with them at least 30 years,” her son said. “She really, really trusts BofA.”
His mother’s history with the service, which cost her about $700 over the years, illuminates the murky area of recurring charges to access information about your own credit.
Craig’s questions to the bank turned up some answers. His mother, now 80, had signed up for a free trial of the service in late 2011, the records showed. She was enrolled by a telemarketer touting the service by phone.
Once the free trial ended, monthly charges of $12.99 began. And they kept on being deducted from her checking account each month, even after Privacy Assist was involved in the 2014 crackdown by the Consumer Financial Protection Bureau.
“She never registered with the website” in order to access her credit information, DeLeu said.
She did, however, get alerts when her credit changed. Seven times over the past five years, she received mailings and email saying that a change had occurred on her credit report. Changes which could, potentially, be the sign of identity theft, if a new account had been opened of which she was unaware.
It turned out the credit changes were normal occurrences, however, such as financing a car purchase. After each alert, Craig’s mother called the company’s office, which was duly recorded.
After much wrangling, Craig wound up with a refund for one year’s worth of the Privacy Assist charges. BofA also agreed to block further charges – waiving the usual $30 stopped-payment fee – to halt the recurring deductions. The bank said it was actually another company that operated the service under Bank of America’s name.
His mother wasn’t eligible for the refund under the consumer bureau’s 2014 crackdown and settlement, the bank’s letter said. The reason was, she had had access to the service for the full period she was enrolled.
In fact, the Consumer Financial Protection Bureau’s gripe with Privacy Assist is that it billed some customers before it even had access to their credit report. It could not have alerted them to ID theft or anything else. Yet it charged them for the service, giving them false comfort that their credit was being monitored.
Seven alerts for $700
But how much more value did Mrs. DeLeu receive than people who were scammed outright? After signing up for a free trial, she was billed some $700, for which she received seven alerts. At roughly $100 per alert, that seems pretty steep, especially for a service she didn’t know she had. Despite calling the customer service, Mrs. DeLeu didn’t connect the alerts with the recurring $12.99 monthly deduction from her checking account.
Craig said he gets credit information and alerts about changes from his own credit card – at no charge. “It’s the same thing, as far as I can tell,” he said. Indeed, most big credit card issuers offer customers free credit scores and other information from their credit report, updated monthly. Including Bank of America.
So why continue to charge $12.99 for the service?
In an emailed statement, company representatives said that, while no longer marketing the service to new customers, BofA is keeping Privacy Assist for existing customers. How many are enrolled, the company wouldn’t say, adding that DeLeu is an “active user.” The primary benefit of the service is daily monitoring of credit bureau activity, with immediate alerts.
Enrolled in service without realizing it? You’re not alone
Mrs. DeLeu, formerly a nurse practitioner before retirement, isn’t one to roll the dice on wild financial ideas, her son says. She isn’t taken in by the promises of internet Nigerian princes or foreign lotteries. Nor is she overly fearful of hackers and identity thieves hijacking her finances.
“I always thought she was pretty sharp,” he said. She’s far from alone in getting snared by a free trial that quietly turns into a costly subscription. In a CreditCards.com recent poll on recurring charges, 35 percent of people said they’d been enrolled in a subscription-based service without realizing it. Mrs. DeLeu’s guard was probably down, Craig said, because the offer came from the bank she had trusted for decades.
Did she get some value from Privacy Assist, considering the alerts sent by mail and email, to which she responded by phone?
“Some,” he said. “Not what she paid for.” Instead of letting charges like this keep rolling along on autopilot, why wouldn’t a trusted bank remind customers what they were being billed for, DeLeu wondered. Especially after a consumer bureau crackdown – doesn’t it make sense to ask at some point if they wanted to keep the service?
That sounds like a reasonable question to me. And what I wonder about is, how many other bank customers, elderly or not, are blithely paying for Privacy Assist, or something like it, because they trust their bank with their money?
What to do
Check your account statements regularly and keep an eye for any recurring charges you don’t recognize.
“Any time a consumer sees the word ‘free,’ they should immediately look for the hook the company is laying out in front to catch them,” said Bonnie Patten, executive director of the consumer watchdog group Truth in Advertising in response to the findings of CreditCards.com’s recent survey on recurring charges. “‘Free’ rarely actually means free. Almost immediately, if consumers are being offered a free trial, it’s so the company can get their credit card information and enroll them in one of these negative option offers.”
See related: Poll: Recurring charges are easy to start, hard to get out of, Buy now, pay forever: Beware negative option plans