What is Credit Card Cramming?

Malcolm Tatum

Credit card cramming is a practice of initiating charges to a credit card without the expressed permission of the credit card holder. In some instances, the holder of the credit card may have some past connection with the entity that initiates the charge, but did not authorize the specific transaction. In other instances, the credit card crammers initiate small unauthorized purchases after illegally obtaining the card information, hoping that holders of the credit cards that are scammed will not notice until it is too late.

Credit card cramming does not always involve credit card fraud.
Credit card cramming does not always involve credit card fraud.

While credit card cramming does not necessarily involve credit card fraud in all instances, the practice is generally considered to be unprofessional. For example, some companies may include vague text within terms and conditions for a purchase that provide the vendor with a loophole to automatically initiate a charge to the credit card at some future point, if the vendor determines the customer would like to receive some new product. In actual verbiage, this clause may be structured somewhat like an automated renewal clause in a standard business contract.

Credit card cramming is sometimes done by an entity a person has done business with.
Credit card cramming is sometimes done by an entity a person has done business with.

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This same approach to credit card cramming is often used in conjunction with some of the so-called free trial offers many people encounter on the Internet. Unless the terms and conditions that govern the free trial are read carefully, the card holder could soon begin to see monthly charges appear from a business that he or she is completely unfamiliar with. This is because the terms and conditions for the “free” trial included signing up for some type of ongoing service, such as online voice mail. Often, it can take a substantial amount of time and effort to cancel the charges and eliminate the credit card cramming incidence. In some cases, it is not possible to receive a refund.

While credit card cramming is common, the average consumer can take steps to minimize the potential for this sort of activity with his or her credit card. Never enter into any type of transaction using a credit card without thoroughly reviewing the terms and conditions. This includes taking advantage of a free trial offer that claims to need credit card information as a means of verifying the identity of the customer. Always review each credit card purchase on the monthly statement and report any irregularities to the issuer of the credit card immediately. Last, never use a credit card to make a purchase over the phone or via the Internet without feeling very secure about the integrity of the vendor. Should even the smallest detail seem uncomfortable, abandon the transaction before it is completed and seek shopping opportunities elsewhere.

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