Trial Offers: The
Deal Is in the Details |
Chances are you've
gotten offers to try a product or service through a "free trial." Companies use
these offers to sell a variety of items, from books and CDs to videos, magazines, hosiery
and Internet access. But as part of a trial offer, a company also must tell you if any
conditions are attached to the deal.
The Federal Trade Commission (FTC) carefully monitors the marketing practices in this area
and offers this information to help you make wise purchasing decisions. Be a savvy
consumer: read the fine print and ask questions. Trial offers can be a great way to try
new products or services without making a long-term commitment to a membership,
subscription or extended service contract. But by accepting the free trial offer, you may
be agreeing to buy additional products and services - if you don't cancel.
What Does "No Risks or Obligations"
Really Mean?
A company may claim its free trial offer has no risk or obligation for the
consumer. And that may be true, but only if you take timely action to avoid future
obligations. For example, you may have to contact the company to cancel during the
trial period to avoid receiving additional goods or services or to pay for what
you've already received. By not canceling, you may be agreeing to let the company enroll
you in a membership, subscription or service contract, and to charge the fees to your
credit card.
How Conditional Trial Offers Work
Here are a few examples of conditional free trial offers:
A company offers you an introductory package of free books, CDs or
videos. If you accept the offer, you may be agreeing to enroll in a club that will send
you the products and bill you until you cancel.
A company offers you the first three issues of a magazine for free.
Unless you cancel after receiving the third issue, you may be agreeing to
a one-year subscription that is automatically renewed each year.
A company offers you free Internet service for 30 days or 700 hours,
whichever comes first (30 days = 720 hours). Unless you cancel within the
30-day period or after you use the 700 hours, you may be agreeing to pay
for continuous Internet service.
A company offers you a free pair of pantyhose. By accepting the offer,
you may be agreeing to receive a second pair as well. You also may be agreeing that, if
you keep and pay for the second pair, the company may ship you a third pair. This may
continue until you tell the company to cancel your account.
Make Sure You Know Who's Selling
What
Sometimes, you call a company for one reason and at the end of the
transaction, you may be told about a trial offer that another company is offering. This is
called upselling. If you receive such an offer, pay close attention to the terms and
conditions. Make sure you understand who you're dealing with and what
you're agreeing to. By accepting the trial offer, you may be agreeing to let the company
you called in the first place give your credit card account information to another seller.
If you don't cancel during the trial period, your credit card may be
charged by the second seller for the product or service offered for the trial period. If
you don't recognize the seller, you may think the charge is an unauthorized transaction.
In fact, by accepting the trial offer, you may have agreed to pay if you didn't cancel before
the trial period ended.
It's The Law
According to the law, companies must clearly and prominently disclose the
"material" terms of their trial offers before you give your consent. Material
terms may include:
the fact that by accepting the trial offer, you're actually agreeing to
be enrolled in a membership, subscription or service contract or paying for additional
products and services if you don't cancel within the trial period;
how much time you have to cancel before you incur charges;
the cost or range of costs of goods or services you'll receive if you
don't cancel during the trial period;
how to cancel during the trial period;
whether you'll be charged a non-refundable membership fee if you don't
cancel within the trial period;
whether fees will be charged automatically to the credit card you used
to buy other goods or services.
Protect Yourself
Trial offers are promoted through all kinds of media: newspaper and
magazine ads, TV and radio commercials, direct mail, and the phone and Internet. In print
ads and offers, the material terms may appear in fine print as a footnote at the bottom of
a page, or on the back of the offer. Read the whole offer carefully before you decide
whether it's a good deal for you. When offers are made orally - whether by radio, TV or on
the phone - listen carefully to the message. If you don't understand the details, ask the
caller to repeat the terms and conditions as many times as it takes until you get it. If
you're not satisfied with the responses, consider taking your business elsewhere. Never
give in to pressure to agree to a deal.
Here are some questions you may want to ask the seller:
Is the free trial offer related to a membership, subscription or
extended service contract?
Do I have to contact the company to avoid receiving more merchandise or
services? If so, how much time do I have? What is my deadline?
Who do I contact to cancel? How do I cancel? By letter? By phone? By
email?
Will I get other products with the free item? If so, will I have to pay
for them or send them back if I don't want them? How long do I have to decide before
incurring a charge?
How do I stop getting additional merchandise or services?
Is there a membership fee? If so, is it refundable?
Will you automatically bill my credit card for anything?
Who is offering the trial - you or another company? What is the name and
address of the company?
Where to Complain
If you have a problem with a trial offer, try to resolve it with the
seller first. If you're dissatisfied with the response, contact your local Better Business
Bureau or local consumer protection agency.
You also may file a complaint with the FTC. The FTC works for the consumer to prevent
fraudulent, deceptive and unfair business practices in the marketplace and to provide
information to help consumers spot, stop and avoid them. To file a complaint, or to get
free information on any of 150 consumer topics, call toll-free, 1-877-FTC-HELP
(1-877-382-4357), or use the complaint form at www.ftc.gov.
The FTC enters Internet, telemarketing, identity theft and other fraud-related complaints
into Consumer Sentinel, a secure, online database available to hundreds of civil and
criminal law enforcement agencies in the U.S. and abroad.
The FTC works for the consumer to
prevent fraudulent, deceptive and unfair business practices in the
marketplace and to provide information to help consumers spot, stop and
avoid them. To file a
complaint or to get free information
on consumer issues, visit
www.ftc.gov or
call toll-free, 1-877-FTC-HELP (1-877-382-4357); TTY: 1-866-653-4261. The
FTC enters Internet, telemarketing, identity theft and other fraud-related
complaints into
Consumer Sentinel, a
secure, online database available to hundreds of civil and criminal law
enforcement agencies in the U.S. and abroad.
|
FEDERAL TRADE COMMISSION |
FOR THE CONSUMER |
1-877-FTC-HELP |
www.ftc.gov |
|
July
2001 |