Consumers have a responsibility to watch out for funky charges on their credit card statements. So Carol Kearns has no one to blame but herself for allowing an unwanted roadside-assistance service to keep billing her for nine years.
But that doesn't let the company, AutoVantage, off the hook. Attorneys general nationwide have accused AutoVantage of duping people into signing up for its service and then sticking them with recurring fees.
Nor does it speak well of Kearns' card issuer, Capital One, which kept automatically renewing the AutoVantage subscription even though her card number changed multiple times over the years because of unrelated incidents of fraud.
"When there's a new card number issued because of fraud, they shouldn't be putting old charges through," Kearns, 68, told me. "They should be protecting you."
She makes an excellent point, highlighting the way legitimate companies often serve as enablers for their sneakier corporate cousins.
Think of how unexpected fees can creep onto phone bills from companies that sell ring tones or text-message horoscopes. If phone companies simply checked with customers first before passing along such costs, a lot of rip-offs could be avoided.
Ditto with credit cards. It seems reckless and highly irresponsible for a card issuer to take it upon itself to transfer old payments to new plastic.
In Kearns' case, the Downey resident received what looked like a $10 check from Budget, the car rental company, in 2005. She cashed it, thinking it was a rebate from a recent trip.
Kearns didn't notice the fine print on the back stating that cashing the check would enroll her in a trial offer of AutoVantage. If she didn't subsequently cancel, she'd remain in the program indefinitely.
Budget and AutoVantage were both once owned by Cendant Corp., which broke into four companies in 2005 after an accounting scandal. Budget is now owned by Avis Budget Group. AutoVantage is part of Affinion Group, a Connecticut marketing firm that operates a variety of so-called loyalty programs.
Affinion has agreed to multiple settlements with attorneys general over its marketing practices. In 2010, it paid $8 million to settle charges in New York that it tricked people into enrolling in various services using checks seemingly issued by business partners.
The company paid $30 million last year to 47 states and the District of Columbia to settle similar charges. About $19 million of that amount was earmarked for customer refunds. Affinion is also prohibited from using the check gimmick as a marketing ploy.
When Kearns fell for AutoVantage's bogus check, the annual fee for the service was $119.99. Over the years it rose to $129.99 and then to $139.99.
Each time it appeared on Kearns' bill, it showed up in a cryptic fashion, usually "TLG*AutoVtg" and a phone number.
"Everything else had a name — CVS, Stater Bros., Best Buy," she said. "This was the only one that didn't."
Kearns mistakenly took the charge as auto maintenance paid for by her husband — an oil change, say, or tire rotation. It wasn't until this year that she finally realized she'd been paying over and over for something she couldn't identify.
"I feel stupid and embarrassed," Kearns said.
She shouldn't. This is all too common, which is what companies like Affinion count on. That doesn't excuse Kearns' tardiness in dealing with this problem. But she's certainly not alone in letting such charges slip by.
At least Kearns should have been able to count on Cap One to protect her from such skulduggery. After all, when Cap One spotted a $1,500 bill run up at a Las Vegas casino a few years ago, Kearns said, it didn't hesitate to cover the fraudulent charge.
In the case of AutoVantage, however, Cap One was more than willing to help the company pull a fast one. Even though it changed Kearns' card number at least twice after she was enrolled in AutoVantage, Cap One continued renewing her membership year after year.
Amanda Landers, a Cap One spokeswoman, said her company wasn't to blame. She laid responsibility at the feet of Visa and MasterCard, which she said have "updater" programs that transfer recurring payments from one card to another.
Kearns' Cap One card was linked to Visa's network. No one at Visa responded to my email seeking comment.
"Customers often get upset when a recurring charge they initiated gets declined just because their account number changed," Landers said.
I understand the point. And I can appreciate that Visa, MasterCard and card issuers don't want to inconvenience people with having to restore ongoing payments such as gym memberships and newspaper subscriptions.
But the prevalence of credit card fraud and unwanted charges makes such no-questions-asked renewals bad policy.
A smarter approach would be for card issuers to routinely query customers any time an account number is changed. A list of all recurring payments should be provided and the customer should have to check the boxes of approved payments.
In the computer age, this strikes me as a process that could be fully automated and could serve as a crucial defense against fraud and scams.
Mike Bush, an AutoVantage spokesman, told me that what happened to Kearns was "unfortunate" and "a miscommunication." He said AutoVantage would refund all the money she'd paid to the company since 2005 — more than $1,000.
"We're not interested in having members who don't want to be part of the program," Bush said.
That's something Kearns could have cleared up for AutoVantage years ago, if it — or Cap One — had bothered to ask.
David Lazarus' column runs Tuesdays and Fridays. He also can be seen daily on KTLA-TV Channel 5 and followed on Twitter @Davidlaz. Send your tips or feedback to firstname.lastname@example.org.