The Latest Scams Circulating the Consumer World. Be warned. Be informed.
December 2005
Contractual Checks
About a year ago, I received a check made out to Consumer Jungle for $3.00. I didn't think much of it, and I gave it to our accountant to cash. He looked at the check and then looked at me; and then slowly shook his head, and turned the check over. In small print below the signature line were the terms of a contract. By cashing the measly $3.00 check, our organization would have been responsible for a $150 per year subscription. Ouch! Read on to find out who sends these checks out and why.
A contractual check is an unsolicited check from a familiar or unfamiliar company. On the back of the check, just below the signature line, are the terms of the contract. $3.00 is a small amount for the company to give you in exchange for your annual business. The company is betting on the fact that you will cash the check without even looking at it and then be too busy or frustrated to dispute the charge.
Who sends out the checks?
- Credit card companies
- Phone book companies
- Marketing companies
- Many others
Sending a customer a checkthat with their signaturesigns them up for a contract is a deceptive business practice.
Who do they target?
- Seniorsperhaps the company thinks the fine print will be too small to read.
- Foreignersperhaps the company thinks they won't understand the contractually-binding language.
- Busy people perhaps the company thinks the person won't read the fine print or have the time to deal with an unwanted bill once it arrives.
What do the checks bind you to?
- An annual membership fee
- A subscription
- Buying an advertisement
Play it Safe
- Read the back of a check
- Do not cash the check
- Shred the check
People are not going to send you free money. Remember there is always a catch!
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