Gray Charges

DEFINITION of 'Gray Charges'

Fees consumers pay via credit card or debit card for unwanted subscription services that are automatically renewed or that are automatically converted from a free trial to a paid subscription. Gray charges also include hidden fees and billing areas. In total, gray charges constituted $14.3 billion in consumer spending in 2013, according to a consumer protection service called BillGuard.

BREAKING DOWN 'Gray Charges'

While gray charges are not illegal, they lie in a moral gray area. On one hand, consumers technically agree to these charges when signing up for the subscription; on the other, companies may be banking on consumers forgetting to cancel unwanted or unused subscriptions instead of relying on consumers’ active intention to continue paying for them. In addition, because gray charges are typically small, some consumers find it more trouble to cancel or dispute them than to continue paying them.

To avoid gray charges, consumers should read the fine print before signing up for a free trial or subscription using a debit or credit card. Check whether the merchant will automatically charge your card for the product or service when the trial period ends or the subscription is about to expire. Review your monthly statements carefully for unwanted or mistaken charges and contact vendors promptly to cancel unwanted purchases. For gray charges made to a credit card, it may be possible to get the charges reversed by submitting a dispute through the card issuer if the company initiating the gray charges is uncooperative.

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