Mystery credit card, phone bill fees investigated

These are the strange charges that pop up on your bills. A third of us get them and it costs those of us that get them, on average, $215 over the course of a year. So what are they and just where do they come from?

Mystery charges are costing Americans billions of dollars a year. One estimate goes as high as $14 billion.

You may have noticed them -- charges for $10.00 and less on your credit card and cellphone bills.

When asked if he's figured out what those charges are for, Palo Alto resident Bob Dressler said, "No, sometimes there are strange descriptions on them."

"Surcharges or taxes, or the city or something like that?" Palo Alto resident Michele Rinaudo guessed. She adds that sometimes they'll say they're texting charges and that she'll just let them go.

Often the charges aren't from the phone companies, but from third parties who pay the phone companies to do the billing.

On phone bills, those types of questionable charges are called "cramming," because they are crammed on the bill.

On your credit card they are called "grey charges" because they fall in a morally grey area.

"It's not fraud, but it is certainly not right," Yaron Samid said.

Samid started BillGuard, a free app that keeps track of your bills and looks for those types of charges.

A common mystery charge is applied when you sign up for something without knowing it.

"Phantom charges are when you signed up for one thing and they ended up tacking onto something else and you didn't notice that because it was somewhere in the fine print where you signed up," Samid said.

Another way these charges end up on your bills is through a process called "free to paid."

Joe Ridout is with Consumer Action.

"These are generally companies that try to deceive consumers into signing up for paid subscriptions under the guise of them supposedly being free offers," Ridout said.

And even when alert consumers find these things and get rid of them, they often come back.

"The other one I like is the zombie subscription," said financial advisor David Hollander. "That's where you actually call and say, 'I want to turn something off,' and then several months later it comes back to life and there it is on your statement again."

Hollander is the president of Liberty Group, an Oakland-based financial services company. He's saved clients money by finding these things. Here's an example.

"They were charging $9.99 for premium messaging without the person really wanting it and it was found on the bill and it was taken off and now they don't have to pay for it, but they did pay for it for a time," he said.

"How do I know if it is phony?" San Jose resident Jason Guillory asked. "Is there somewhere I can go?"

Great questions. You need to go through your bill, line by line, and when there is something you don't recognize, contact the credit card or phone company and ask that the charges be removed.

And if it's your phone company, consumer advocate Ridout says good luck.

"When it appears on your cellphone bill it's a real problem because you don't have the same protections that you do on your credit card bill," he said. "There are federal protections, such as the right to a charge back, that you simply do not have if it is on your cellphone bills."

For instance, federal law gives you 60 days to catch these charges on your credit card. With a phone bill, the company makes the rules.

An easy way to catch these charges is to crowd source with other consumers through this free app, BillGuard.

"When someone else is able to spot on their credit card or debit card bill a charge that doesn't look right, they are able to simply flag it in the system," Samid said. "And then others who have the same charge will have that particular charge prioritized for their review."

And here's the insider trick for your phone bill -- call your mobile provider and tell them you no longer want third party billing. Done. You don't have to worry about it again.

We spoke to all of the phone companies. They say they work hard to keep unauthorized charges off your bill and if you have a problem call.

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