The Better Business Bureau is warning consumers about a New York-based online retail company that is submitting unauthorized credit card charges months after purchases are made. Classic Closeouts offers apparel, jewelry and other merchandise online at classiccloseouts.com.  Consumers nationwide have filed hundreds of complaints with BBB about the company’s practices. Complaints from Michigan residents include:

A Hazel Park woman complained to BBB after she received an unauthorized charge of $69.99 a year after making a purchase on classiccloseouts.com. 

A man from Belleville reported to the BBB: “I used this site once and it was years ago. I was recently billed for no apparent reason and without any explanation for $69.99 I tried to call their customer support number various times with no answer or response.”

Another consumer from Moran Township wrote the BBB: “In February of this year I placed my first, last and only order with Classic Closeouts. When I got my statement for the credit card that I had used for that order this month I had another charge from Classic Closeouts for the amount of $69.99. I checked on their web site and the only order they show under my account is the one I place in February for around $28.00.”

A family from Saginaw informed the BBB of losing hundreds of dollars due to unauthorized charges from the classiccloseouts web site.

Classic Closeouts has an “F” grade rating with BBB and nearly 900 complaints from consumers across the country.  It has failed to answer all but 24 cases.

“The BBB is seeing a trend with online merchants enrolling their customers in monthly subscription programs with high fees for low value services,” said Tim Burns, Public Affairs Director for the Better Business Bureau Serving Eastern Michigan.  “While the big print in online advertisements may promise huge savings, it is important to also read the fine print so you don’t commit yourself to spending money on unexpected fees and charges for unwanted products and services.  It is important to understand an online retailer’s privacy policy, billing terms and conditions, shipping procedures, and return and exchange rules before you provide them with your credit or debit card number.”

The Federal Trade Commission recently announced it had filed a lawsuit charging Classic Closeouts illegally made unauthorized charges and debits to consumers’ accounts months or years after they bought various items. The action further alleges many consumers disputed the charges with their financial institutions. After the financial institutions reversed the unauthorized charges, the company contested these disputes, claiming that consumers had chosen to join ThirdFree, Classic Closeouts’ sister company that offers a frequent shopper club. Consumers denied agreeing to join the club.

The BBB reminds consumers to:

• Carefully review credit card statements.  Notify your credit card company immediately of any unauthorized or incorrect charges.
• Understand that making online purchases with debit cards does not provide the same protections under federal law to dispute charges as credit cards.  Be aware that unexpected charges to debit cards could lead to your bank account being overdrawn and result in your being charged fees from various parties because of the resulting non-sufficient fund payments.
• Check the company’s reliability report with the BBB before making an online purchasing.  Go to www.bbb.org or call 248-644-9100.

Tags: BBB, BBB Detroit, BBB Michigan, Better Business Bureau, Better Business Bureau Michigan, ClassicCloseout, credit cards, debit cards, online shopping tips, tim burns