The Federal Trade Commission (FTC) recently issued a new enforcement policy in which it warns companies not to use illegal and misleading tactics to trap consumers into various subscription services. The FTC took this step in response to increasing complaints by consumers about misleading sign-up tactics including adding unauthorized charges, automatic renewal and continual monthly billings that are impossible to cancel.
While this is a new enforcement policy, the FTC has often brought legal action against companies using illegal subscription practices such as hiding important payment information and companies that converted free trials to paid subscriptions before the free trial period ended.
According to the new policy which can be found here https://www.ftc.gov/system/files/documents/public_statements/1598063/negative_option_policy_statement-10-22-2021-tobureau.pdf companies must disclose clearly and conspicuously all material terms of the services including the cost and how to cancel as well as obtain the consumer’s express informed consent before charging the consumer for a product or service. In addition, companies must provide easy cancellation mechanisms.
There is never anything fine in fine print, but whenever you sign up for any service or subscription, particularly one that initially indicates it is free, you should make sure that you have carefully read the fine print indicating the terms of the contract including what you need to do to cancel the service. A particular red flag is when an advertised as “free” service requires you to provide a credit card number under some guise. Scammers do this to start charging your card without your authorization.
It is also a good idea before you sign up for some service or subscription to do a search engine search to see if there have been complaints against the company.
For those of you receiving the Scam of the day through an email, I just want to remind you that if you want to see the ever increasing list of Coronavirus scams go to the first page of the http://www.scamicide.com website and click on the tab at the top of the page that indicates “Coronavirus Scams.” Scamicide was cited by the New York Times as one of three top sources for information about Coronavirus related scams.
If you are not a subscriber to Scamicide.com and would like to receive daily emails with the Scam of the day, all you need to do is to go to the bottom of the initial page of http://www.scamicide.com and click on the tab that states “Sign up for this blog.”