Visa Cuts Off 100 Scamming Merchants

By Eileen A.J. Connelly, AP Personal Finance Writer

NEW YORK (AP) — Visa Inc. has cut off 100 scammers who use bogus marketing techniques to dupe consumers in the past six months.
Among the most common hustles: billing the credit cards of customers who thought they were getting free trial products like dietary supplements or teeth whiteners $79.95 per month or more, and then making them jump through hurdles to get the charges to stop.

"We've been monitoring this situation from this past summer in particular," said William M. Sheedy, a Visa group president. The number of complaints from cardholders who disputed ongoing charges they never agreed to shot up, although the merchants and the products they sold often varied.

While there are always a handful of complaints about merchants, most are resolved quickly. But in the case of the ongoing charges, it was clear the problem was widespread. "Consumers are being fleeced," Sheedy said.

Visa told The Associated Press that about 100 merchants had their payment processing terminated because of chronic complaints since early summer. The scam is so common, the San Francisco payment processor is teaming up with the Federal Trade Commission and the Better Business Bureau to alert consumers.

Most of the time, the swindlers use Internet ads to lure their customers. The ads often feature unauthorized photos of celebrities like Oprah Winfrey and Rachel Ray, implying endorsements for supplements like acai berries or teeth whiteners.

Newer variations take advantage of the recession with work-at-home scams, or con people into seeking information about applying for government grants linked to economic stimulus programs.

Winfrey and her frequent guest Dr. Mehmet Oz filed several lawsuits this year trying to stop companies from implying they endorsed products made with acai berries.

"The fraud artists look for the fraud du jour and they will play that up magnificently," said Lois Greisman, an associate director of the FTC.
Other common features on the deceptive ads are fake testimonials and credit for the discovery of breakthrough products to a "local mom," said Stephen Salter, vice president of BBB Online. When someone clicks on the ad, their computer's location triggers a program that sets the origin of the "local" mom near that user.