“Free Trial” Fraud Alert
Friday, October 4, 2019
Free trial offer? Not so fast!
Checking out a free trial? Beware of fine print, or you might get stuck with a deal that's anything but free.
When a business promises to let you try a product or service for free, it can be enticing. But companies that offer free trial offers often slip automatic renewal clauses into the fine print so that consumers are locked into expensive and recurring charges, even if the original product started out as “free.”
Automatic renewal clauses are found in a range of services such as gym memberships, subscription meal boxes, and entertainment streaming services. Unfortunately, many unscrupulous companies depend on free trial offers upfront, followed by hidden automatic renewal clauses, to trick consumers into an automatically renewing contract or to mask rate increases.
Unbeknownst to the consumer, many companies bury language deep in the fine print of their contracts that leave it up to the consumer—by a date of the company’s choosing—to cancel a contract at the end of a free trial. If the customer fails to notify the business in time, they will be regularly charged.
Many times, consumers are unaware that their “free trial” rolls over into a binding contract until they start seeing new credit card charges or products they didn’t expect arriving at their house. Some companies even hide language that requires a consumer to stay in the plan for a period of months when their “free trial” rolls over into a contract.
Nearly half (48 percent) of consumers have had a free trial roll over into an expensive, automatically renewing contract. Fortunately, there are several steps consumers can take to protect themselves:
- Do your homework. If you are offered a free trial, research online reviews. If there are several complaints about how the company started charging consumers for product they did not purchase and made it difficult to stop the shipments, this is a huge red flag.
- Read the pre-selected boxes. By law, companies must disclose the presence of an automatically renewing contract to consumers making the purchase online. Many companies will do this by pre-checking boxes that state that it is OK for them to bill you and continually send you additional products on a weekly or monthly basis. If you do not want a surprise bill, read over the content of the website carefully.
- Mark your calendar. Free trials often have an expiration date. After the free trial expires, companies will charge your card or send you another product and bill you. If you want to be able to make a decision on whether to continue receiving the service or products, mark your calendar by the cancel date so you can ensure that you are not unknowingly locked into a lengthy contract.
- Check your credit card statements regularly for mysterious charges. In addition to protecting yourself from identity theft, this will allow you to spot charges from services you did not mean to subscribe to or that you did not provide consent to.
If you find a mysterious charge on your bill or if you receive unexpected product in the mail, you have rights. First, attempt to work with the merchant to cancel your subscription and have the charge refunded. If you are not successful, contact your credit card company and inform them that you did not authorize this charge.
It is illegal for online retailers to fail to clearly disclose the presence of an automatic renewal clause. And many states have enacted legislation to protect offline transactions from these deceptive clauses.