By the time Jane Hrabak, 59, figured out what the unfamiliar charge on her credit card bill was for, she was out about $1,000. A "buying club" she doesn't recall joining had been draining first $10, then $20, a month from her account. "I felt so dumb," says the Belle Plaine, Iowa, commercial artist.
Congress passed legislation in 2010 to prevent third-party sellers from getting financial information without having clear consumer consent. But Ioana Rusu, regulatory counsel for Consumers Union, warns of a loophole: The federal law applies only to online transactions, not telemarketing calls or direct mail. "It's like the game Whack-a-Mole," says Rusu. "Whenever you tackle one area, the practices pop up in another spot."
To protect themselves, consumers should be wary of any "free trial" offers. Be certain to ask whether you will be billed automatically if you don't cancel, and watch for unauthorized charges.