The Federal Trade Commission has issued yet another warning about free trial offers that can end up costing you money.The agency announced on Wednesday that the U.S. district court in California has granted its request to temporarily shut down an alleged internet marketing scam that promoted bogus free trial offers.
The case underscores why you need to be careful about enrolling in free trials while shopping for the holidays or any other time. And even "legitimate" free trials can leave you with unexpected charges.
Consumers bilked for tens of millions of dollars
In the case announced Wednesday, the FTC accused numerous U.S. and United Kingdom-based companies and individuals with charging customers full price in connection with free-trial offers for more than 50 dietary supplements and personal care items. The products were marketed as promoting weight loss, hair growth, clear skin, muscle development, sexual performance and cognitive abilities, the agency said.
The complaint (pdf) says customers typically were told they had to pay just $4.95 for shipping and handling. But within two weeks, it says, the customers' credit and debit cards were billed for about $90. Customers also were charged for "complementary" products, and they were enrolled without their consent into so-called continuity programs that shipped them additional supplies of the products for around $90 monthly, the complaint says. It says the scam cost consumers tens of millions of dollars.
This is one example of numerous cases the agency has taken against what it says are bogus free trials.
"Scammers often use 'free' trial offers, with undisclosed or buried terms, to enroll you – without your knowledge – in costly membership programs," said a warning the FTC issued Wednesday.
In another case, a federal district court in July shut down a San Diego-based group of internet marketers that the FTC said charged customers about $98 for a free trial in connection with a variety of products, including skin creams, electronic cigarettes, and dietary supplements. As with the case announced Wednesday, the FTC said customers also were signed up and charged for additional shipments without their permission.
"Legitimate" free trials are troublesome, too
Scams aren't the only thing you need to worry about when it comes to free trials. It's easy to end up with unexpected charges even with legitimate offers from well-known companies. That's because when you sign up for many of these deals, you are agreeing to begin paying for a product or service if you don't cancel within a certain period after the free trial ends. But companies don't always make that clear on their websites or in other marketing. And even if they do, it can be easy to forget to cancel before the charges begin.
Consider this free trial offer from the genealogy company Ancestry, which has monthly memberships ranging from $20 to $45 and six-month memberships from $99 to $199. "Free trial requires registration with a valid credit or debit card," the website says. "You will be charged the full amount of your chosen membership price on expiry of the free trial, unless you cancel at least 2 days before the end of your free trial." And as with many such deals, your subscription renews automatically if you don't cancel at least two days before the renewal, another thing to worry about.
What to Do
Don't accept free trial offers without carefully reading the offer, especially if you're required to provide a debit or credit card number or other form of payment. Try using a web search to see what others are saying about the company and the deal.
If you decide to sign up, use a credit card instead of a debit card and keep a copy of the offer. That way, if there's misrepresentation, you can dispute the charges with your card issuer. It's much more difficult to fight unauthorized or incorrect charges on your debit card. One trick is to use a temporary credit card number that some banks, including Citibank and Bank of America, will provide on request. The number, which is linked to your account, expires within a short period so that no one can bill your card again without your consent.
If there's a deadline by which you must cancel a free trial or ongoing service to avoid being charged or auto renewed, note it some place where you'll be sure to see it without having to remember, such as in an electronic calendar with reminders.
For more tips, visit the FTC website.
I ordered a skin cream online after seeing one of these "great deals" on TV. Not a free trial but practically free--about $4 for one jar of the product. But my credit card payment wouldn't go through. I called Bank of America and asked what was going on. The credit card rep said: "WE stopped the charge from going through. We know this company's offers are a scam and you'll end up in a contract to buy skin cream every couple of months at a much higher price than the company promotes on TV." Well, I was amazed but grateful that BOA was watching. I had no trouble after that. (Also, I don't recall that the skin cream company provided a contract I could read before they charged me for the product and I attempted to pay for it. ANOTHER red light!)
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