THE CONSUMER CONNECTION
DAVID HOROWITZ
If there’s any doubt, check it out! Ask David Horowitz
Ireceived a troubling complaint recently ness, it has faults. Like any other thorough-
from a small-business owner in Glendale, fare, the Internet superhighway has occasional
California. The service that handles the potholes and detours. It’s important to remem-
credit-card authorizations for her online ber that computers can be hacked at some
sales had been hacked and she got hit with level by the right (or wrong!) clever person.
massive transaction fees without This particular company knew
her knowledge or the ability to these facts well when it drafted
stop them. Other clients of the its legal language.
online service were also hit with Most important, never enter
bogus transactions. any kind of service agreement
However, the merchant without understanding and
account service would not reim- agreeing to the terms and condi-
burse any of its clients for their tions. In addition to knowing
losses. Instead, they were told how a service operates, you
“that was the risk they took” need to know who is responsi-
using the system. Thefrustrated ble for what, and what your
entrepreneur was appalled and remedies are before trouble
came to me for help. David Horowitz strikes. If you don’t agree to the
But instead of being able to Fight Back! terms, then don’t use the service!
and get the money refunded, I had to acknowl- The lesson in this case carries over to all
edge the risks of some Internet services. The businesses large or small: “When in doubt,
service provider knew the dangers and pro- check it out.”
tected itself with all sorts of contract dis-
claimers. The clients who lost money should Consider overdraft protection
have known it, too, so they could protect Many consumers think that with debit
themselves while using the service. But they cards you can’t get into a hole by overspend-
apparently hadn’t done their homework. ing and don’t have to pay extra for interest,
I found the information quickly on the late fees or other aggravating charges. But
merchant account’s Web site, where clearly shoppers are learning differently.
written terms and conditions for using the Many banks approve debit transactions
online payment-processing service were even if the shopper’s account doesn’t have
posted. The company had carefully detailed, enough funds. They allow overdrafts as a
in no uncertain terms, what it would be courtesy, rather than embarrass or inconve-
responsible for and what risks clients were nience the customer by rejecting the card.
taking by using its service. However, consumer advocates say that
I was impressed by how comprehensive such practices are there to generate steep fees,
and well crafted the agreement was in protect- as each overdraft purchase can incur penalties
ing the company. The terms specified numer- of up to $30. And sometimes these fines com-
ous times in several different sections that the pound the problem since they are deducted
company was not responsible for “hacking or from the account, leaving even fewer funds.
infiltration of the system by a third party.” If you think debit cards will prevent you
The company also disclaimed any obliga- from overspending your limit, think again.
tion to reimburse a client due to a failure of its You may want to sign up for a bank’s over-
system. And the first paragraph clearly stated draft protection, which can be linked to a sav-
that by using the site and the services, the ings account or a credit card. However, to
client agreed to accept all these conditions. really protect your pocketbook, consider
Ethical or not, the company had legally asking the bank to set your overdraft limit to
protected itself in the event of system failure zero so that purchases can’t be approved if
or hacking. I had to tell the frustrated client the money isn’t there. C
that if she had agreed to use the site without
reading or understanding the contract terms,
then unfortunately she was the one who was Costco member David Horowitz is a leading
negligent, because she should have been consumer advocate. His two-hour national radio program airs Sundays on Talk Radio
aware of the risks and limits of the service. Network. For stations and times, check the
There are important lessons to be learned radio page on
www.fightback.com.
from this situation. First, as much as people
view the Internet as an instant, always avail-
able and valuable portal to conducting busi-
AMY CANTRELL
My son fell and hit his head on the
kitchen counter. We rushed him
to the emergency room and he got
stitches. We got one bill from the hospital for $597.80. Then we got another
bill from Emergency Physicians Ltd.
for $463 for the same treatment. Isn’t
this double-billing?
Sara
Downers Grove, Illinois
Sara, this practice is referred to as
“unbundling,” and it’s legal. Instead of
“bundling” charges into one big bill
for a visit to the hospital, several bills
are sent to cover each area. That can
be for hospital admission, triage (
preliminary diagnosis), first aid, physician specialists, diagnostic tests such
as an X-ray (plus an extra bill from
the radiologist) and for drugs or medical supplies from the pharmacy. The
list goes on.
Unbundling simplifies accounting
and tracking by itemizing each service
or supply. But the main reason is that
medical facilities often outsource services to individual doctors or businesses. For example, your emergency-room physician contracted for services
through Emergency Physicians Ltd.,
which billed you separately. And the
hospital billed you for the use of the
facility and staff, plus supplies.
Q A
ARTICLE FEEDBACK
&
To ask David Horowitz a question,
log on to
www.fightback.com
and “Ask David.” He will personally
respond to your problem if you follow
the instructions printed on his Web
site. (Costco members receive a
rebate off the normal fee.)
Questions and answers of the greatest interest to Costco members will
be used in this column with the permission of the contributor, and will
be posted on
www.fightback.com.
© 2005 Fight Back! Inc. All rights reserved.
