About once a week I receive a check in the mail which ranges from $3.00 to $8.00 depending on the service being offered. I quickly glance at the sender’s information and then I turn the packet over to my favorite piece of office equipment – my shredder. The reason being is that if I cashed the check I’d be signing up for some unwanted buying program or travel program or rebate program or whatever the fine print on the back said I’d be agreeing to and be obligated to pay for over the next year. Those little checks are called “contractual checks” and once endorsed by you they are as binding as if you sat down with a sales person and signed it in front of them.

Although unsolicited it (the check) most likely will come from a company you have an account with or from an associated company who uses the mailing list from the first company and pays a fee or commission for your name. On the back of the check, just below the endorsement line, are the terms of the contract, in print so tiny that it’s very difficult to read. The amount of the enticement is a small amount for the company to pay for a years worth of fees you’ve agreed to pay if you cash the check. What they’re betting on is that you’ll cash the check without even looking at it and then be too busy or intimidated to dispute the charge.

The checks I receive come mostly from one of my credit card companies or an associated firm offering some “important service” which is being offered to only those who have this specific credit card. But contractual checks are not limited to credit card companies. I’ve received them from phone book companies and other marketing companies. This deceptive business practice isn’t limited to any one type of company and it’s not only through the mail. They can get you through your computer as well.

Recently I purchased a software program for some desktop publishing. It had some bonus software with it. It looked interesting so I installed it as directed. When I was requested to accept the licensing agreement I just clicked on the “I accept” button as I had done probably a hundred times before. I truly don’t think I have ever read those agreements. But I guess I have to now, because I recently received a packet in the mail welcoming me to a discount buying program I never heard of and certainly knowingly wouldn’t have signed up for. When I called I was informed that I had agreed to a “trial” membership when I accepted the licensing agreement from the bonus software I installed. I immediately canceled my “trial” membership but I was told I’d still be charged the $9.99 for the first month because I agreed to it by checking the “I accept” box at installation. I refused to pay the fee and threatened to report them to the Michigan Attorney Generals Consumer Affairs department if they didn’t cancel immediately. They did cancel without the charge but I wonder how many people don’t bother to fight back because they don’t know they can or that they figure $9.99 isn’t worth fighting over as long as they cancel the rest of the contract. A company can make a great living just by collecting $9.99 once from unsuspecting consumers and not charge them anything else.

Seniors are targeted by these companies because these companies figure that getting $5.00 extra this month is appealing and that the fine print on the back of the check is so small that you can’t read it anyway. But seniors aren’t the only targets.

Neighborhoods that have large populations of non-English speaking foreigners are hit regularly because the companies think they won’t understand the contractually binding language. Young people are targets also.

With the proliferation of cell phones that have multiple uses (i.e. Cameras, MP3 players, email, etc) there is a whole new market to scam. My niece got her new cell phone and thought it’d be “cool” to have one of those ring tones that plays a new hip-hop song instead of a boring ring. She went on line for a “free” ring tone and downloaded the program to her phone and checked all the boxes as requested. When she received her phone bill the next month $6.95 had been added for ring tone service. What she didn’t know is it was free as long as she listened to the tone on her computer, but once she downloaded the program she was obligating herself to a one year contact. Since the phone contract is in an adults name, but an under age person signed the ring tone contract, can they get out of it? I’m not an attorney but I suspect that it might not be worth the $83.40 for the year to find out. I’m willing to bet my attorneys hourly rate that the ring tone company thinks that way too.

So before you find yourself with an annual membership fee, a subscription or buying advertisement make sure you play it safe. Read the back of the check or the licensing agreement. Do not cash the check or click on the “I accept” box until you know all the facts. Finally, shred the check. If you don’t have shredder go out and get one. This inexpensive piece of equipment should be mandatory for every household or business. Not only does it protect you from the contractual check scam but from several others we’ll discuss over the coming year.

Fred L. Goldenberg is a Certified Senior Advisor and the owner of Senior Benefit Solutions of Michigan. He is a founding member of the Senior Resource Alliance of Northern Michigan.