In common usage, a scam is defined as some sort of a scheme to defraud a person of money or property. Usually, when we speak of a scam we envision some boiler-room operation where shady characters using a bank of telephones fleece their unsuspecting victims. But this is not always the case. In today’s business climate, there are many cases - usually involving direct mail or telephone solicitation - that teeter on the thin line between legitimate business and fraud. Sometimes these questionable actions are carried out by major corporations.

I recently received a proposal from Days Inn, a component of Cendent Corporation. In the letter was a check, made out to me, in the amount of $2.50. At first glance, I though this was some sort of a rebate from the last time I had stayed at a Days Inn. Reading the information accompanying the check I found this interesting explanation: “Days Inn is giving you this check to thank you, in advance, for answering the questions below ....”

Isn’t that nice! They’re paying me to fill in their questionnaire. That’s a rather handsome fee for answering just seven questions. This sounds too good to be true. And it is!

Reading further, I found this. “... and for trying all the time-and-money-saving benefits of Travelers Advantage.” Whoa! Somebody is trying to sell me something, but they have disguised it as a rebate. Looking carefully at the check, I find this statement: “Cashing this check activates a free 3-month membership in the Travelers Advantage program ...”

Well now, is this such a bad thing? Somebody is willing to give me a free 3-month trial, and pay me $2.50 to boot. That sounds like a win-win situation. At this point, it is time to remember something my old Daddy told me a long time ago. He said, “Boy, always remember TANSTAAFL.” This translates as There Ain’t No Such Thing As A Free Lunch. If something sounds too good to be true, it most certainly is!

Reading ALL the fine print, I found that at the end of the “free” trial period, unless I specifically notify this company to “discontinue my membership,” an annual fee of $69.99 will be billed to the credit card I used at a Days Inn motel. There are several disturbing factors involved here:

° What is advertised as a “trial membership” turns out to be a regular membership with no charge for the first 3 months. Unless I take action to discontinue it, this remains a regular membership.

° We normally consider a credit card transaction to be a one-time thing. There are exceptions where we might authorize a business to make regular charges against a card, but that requires a special
authorization, clearly spelled out. In this case, Days Inn is admitting that although I considered my use of the card as a one-time use, they have kept my credit card number on file and will use it again. This leads me to wonder how many other businesses still have my card number on file?

° By endorsing this check in order to cash it, I am also authorizing Days Inn to automatically renew my membership every year, at the then-current fee. If I cash this check, then they can keep renewing my membership, at whatever fee they wish to charge, unless I take action to discontinue. Isn’t that a nice arrangement? Unless I do something, they have a free hand to charge me whatever they want.

I have to wonder how many people receiving this solicitation cashed the check without reading all the conditions? I wonder how surprised they were to later find a charge of $69.99 on their credit cards? It must be a substantial number. Otherwise, why would this company go to the expense of sending out thousands of letters, with enclosed checks for $2.50? They would do this only if enough people would bite so the company could show a profit.

It is easy to see this company truly believes in the motto caveat emptor (Let the buyer beware!)

Is this a scam? I’m sure the company attorneys can make a learned, legalistic explanation of why this is a legitimate business practice. I don’t care!

Look at the facts: Travelers Advantage apparently cannot sell enough memberships in the open market, so they are resorting to disguising their sale as part of a “survey,” with the added inducement of $2.50 to everyone who will accept their pitch. They are working on the assumption that enough gullible people will not read the fine print, or will be so slow to cancel their membership so that they will pay at least one month’s fee of $69.99. That will certainly make up the cost of sending the letter and the $2.50 “payment.”

Second, I do not know the connection between Day’s Inn and Traveler’s Advantage. They may be part of the same corporation. I do know that Day’s Inn has sold my name and address to Traveler’s Advantage, and are also willing to provide them my credit card number. That is enough to spark a small protest on my part. I am taking a long trip late this summer, with many nights spent in motels. Days Inn will not be among those motels used. There’s plenty of competition, so I don’t have to patronize a business I consider to be engaged in a shady operation.

Back to my original question. Is this a scam? I follow the old rule: if it looks like a duck, walks like a duck and quacks like a duck, then it is a duck!

Al Manning lives in Waynesville and can be reached at amanning@asap-com.com

 

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