Boston, July 25, 2013 - Though U.S. consumers regularly use debit and credit cards, not all transactions result from conscious decisions by cardholders. Grey charges--deceptive and unwanted credit and debit card charges that occur as a result of misleading sales and billing practices--total more than US$14 billion per year among U.S. cardholders, roughly US$215 per cardholder incurring these charges. Though grey charges aren't technically fraudulent, they present a dilemma for credit and debit card issuers: generate interchange fees from grey charges or incur service-related expenses when cardholders dispute charges.
Based on BillGuard-provided non-personally identifiable information for 4,817 randomly selected BillGuard users from January to December 2012, this Impact Note by senior analyst Ron Shevlin sizes the grey charge problem among U.S. cardholders (debit and credit) and the service cost impact on issuers. The piece also defines the 11 types of grey charges and shows how it is in issuers' best interest to help cardholders monitor and avoid grey charges.
This 17-page Impact Note contains 13 figures and four tables. Clients of Aite Group's Retail Banking service can download the report.