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The Truth About Free Trial Offers

Jenna Taubel

Jenna Taubel About The Author

Dec 6, 2018 7:43:00 AM

are free trial offers a scam | how to avoid free trial offer scams |  first alliance credit union mnIf you have ever been on the Internet, you have seen advertisements offering free trials for everything from whiter teeth and bigger muscles to jewelry and appliances. While offering a free trial of a product or service is perfectly legal, consumers should still be wary. The fine print of those offers end up costing consumers hundreds of dollars. It’s important to understand how free trial offers work so you can avoid feeling scammed by less than honest business practices.

How Free Trial Offers Work

Most people get drawn into free trial offers when advertisements show up on other websites while they are shopping. You could be on an a website like Amazon or Facebook where a free trial offer ad will pop up, but when you click on the ad you are redirected to another website to claim the free trial.

These types of free trial offers will often have testimonials or claim celebrities use and approve of the product to entice you to try it out. To claim your free trial, though, you must enter personal information, including a credit card. The page will also require you to agree to terms and conditions, which is made easy; all you do is simply check the box, and sometimes the box is pre-checked for you. These types of free trial offers rely on the fact that most people do not actually read the fine print. This is what causes problems for many people.

The terms and conditions for all of these free trial offers are usually the same. Usually the terms and conditions for the free trail offer state that if you do not cancel or return the item after 14 days, they will charge you full price. Then they will send you another month supply 30 days later and charge you again each month until you cancel the subscription. Fortunately, if you do return the product within 30 days you will receive a full refund. In some cases, even after 30 days you can still get a partial refund.


Example of a Free Trial Offer Terms and Conditions to Watch Our For:

Example of a Free Trial Offer Terms and Conditions | Are free trial offers a scam | financial security | first alliance credit union mn


However, once the 30 days have passed the company offering the free trial typically has detailed cancellation policies that can be difficult to comply with making it next to impossible to actually cancel the subscription. On top of that, you will be charged monthly until you are able to cancel. If you’re not paying close attention to your bank account, you can be out hundreds of dollars in a short time with little to no recourse.

Are Free Trial Offers a Scam?

The Federal Trade Commission (FTC) classifies these types of free trial offers as “Negative Option Marketing”. This means the company uses the consumer’s lack of action to indicate consent to continue to purchase additional products or services. The FTC recognizes these offers can pose a serious financial risk to consumers when the terms and conditions are not clearly stated and transparent, and there are regulations in place to monitor this type of sales practice.

However, they are technically not scams, simply less than honest business practices. This is because you actually do receive the product or service you signed up for with the free trial, even if you didn’t want the full subscription. These types of free trial offers definitely feel like scams in the way they are structured. They are also put together cleverly so financial institutions often don’t have rights to dispute these extra charges on behalf of their customers. 

Amber Cooper, Account Services Specialist at First Alliance Credit Union explains: 

"The company will have proof of delivery via UPS or FedEx tracking along with screenshots of the purchaser agreeing to the terms and conditions. This takes away the rights of a financial institution to dispute the transactions. Often times when we get notification from a member, we don’t have rights to the charge-back because the 30 days has come and gone. It leaves our members with a loss, it is really unfortunate.

are free trial offers a scam | avoiding free trial offer charges | first alliance credit union mn


Real Life Example:

One of our members unknowingly signed up for a free trial and began seeing outrageous charges on her credit card monthly as a result. She saw an ad for a watch pop up when she was on Amazon. She thought she was getting a really great deal from Amazon, so she went ahead and ordered the watch. Fourteen days later she was charged $99.31 because she didn’t return the product! She reached out to the credit union, we were able to get the company to cancel her subscription and promise she wouldn’t be charged again. However, she was still out the $99.31 for the watch, as the two week return window had closed at that point. They had proof she checked the box agreeing to the terms and conditions, and proof she received the watch.


Tips to Avoid Free Trial Offer Regrets

These types of free trial offers rarely work out in your favor. If you do plan to sign up for a free trial offer you absolutely MUST read the terms and conditions completely. Do not assume they have your best interests in mind. Here are a few tips to keep in mind before clicking the “I agree” checkbox on any free trial offer:

  • If it seems too good to be true it probably is; the products being offered are often not up to the standard the ads present them to be.
  • Free doesn’t mean free. If they are asking for you credit card information for a free trial, it is a red flag that they will charge your account at a later date. Understand exactly what those charges will be and when they will occur.
  • Look for who is actually behind the offer. Just because an advertisement appeared on a trusted site doesn’t mean you can trust the company selling the product.
  • We can’t stress this enough: the best thing to do is to always, always, always look in the terms and conditions before ever checking a box.
  • If you do sign up after reading the fine print, set a reminder notification on your phone a few days before the trial period ends so you remember to cancel or return the product and avoid being charged unexpectedly.

We can guarantee that if you have to check a box for reading term and conditions for a free trial offer, that there are terms in the fine print you probably wouldn't agree to. Checking a box at checkout for a free trial offer should always be a red flag. Additionally, if you do choose to move forward with the free trial and then cancel within the trial period, the company will likely send you endless offers for other products and free trials in an attempt to you lure you back in.

Summary:

Free trial offers are not something to sign up for on a whim. You need to understand what you are on the hook for if the product is not returned or your subscription is not canceled with in the trial period. You must also pay attention to the fine print. As a best practice to protect yourself from financial loss, do not check the “I agree” box for an offer that allows the company to charge you for non-action or will automatically enroll you for additional products or services. If you do find yourself the victim of these dishonest business practices from a free trial offer, report it to the FTC. You also can contact your local consumer protection agency and file a complaint with the Better Business Bureau.


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