While not all offers of a “free” trial of a product from a company are scams, this is the basis of many scams. The scams begin with ads that appear to offer a free trial of a product with the consumer only being required to pay a small shipping and handling charge. . While there are companies that indeed do offer free trials of their products, the scammers use fine print that the consumer never reads or even sees that charge the victim of the scam’s credit card.. Making things even worse, many of the scammers also automatically enroll the victims of the scam to receive monthly deliveries of their products, all of which are paid for by the credit card which the victim of the scam provided thinking the card was only to be charged the small fee for shipping and handling of their “free” product. This business practice is called negative option continuity plans and they are highly regulated by the FTC which requires clear and conspicuous disclosure of all relevant terms of the offer as well as require that the company get the expressed informed consent of the customer before charging their credit cards.
Recently, the Federal Trade Commission (FTC) settled a legal action against Goopalkrishna Pai and eight companies he owned that marketed a variety of skin creams online as free with the only cost being a nominal shipping and handling fee of $4.99, however, Pai would then charge his customers full price for the product and bill them monthly for continuing deliveries with the details of the fees hidden in fine print not readily seen. Under the terms of the settlement, Pai is banned from negative option continuity plans marketing and must turn over funds to the FTC to refund to customers he scammed. As further information becomes available about these refunds, I will let you know.
This scam is very easy to avoid. If there ever was an offer that was too good to be true, this is it. This is also a good time to remind you to never use your debit card for purchases. Only use your credit card. If you are scammed by fraudulent charges on your credit card, you can easily get the charges taken off of your credit card. The consumer protection laws that govern debit cards are not as strong and if you delay notifying the bank where the account tied to your debit card is located, you can potentially lose everything in that bank account with no recourse.
Also, because there rarely is anything fine in fine print, it is important whenever you purchase something to read the fine print that contains the terms of what you have agreed to. Particularly be on the lookout for negative option continuity plans not conspicuously disclosed.
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