Beware of free trial offers: 'free' isn't always free
posted by Jace Day on Wednesday, July 15, 2020 in SHAZAM Blog
It’s a sign of the times during this pandemic as we try to stay connected. We’re on our phones scrolling through social media and tending to email. While browsing, you see an ad for a chance to try something out for free. You think, “Why not, what have I got to lose?”
Here’s why not and what you stand to lose
What appears to be a free or low-cost trial can add up to be much more that you bargained for, with strings attached. Most free trials require consumers to enter their card information to pay for shipping. This information can then be used to cover future costs if the cardholder forgets to end the trial or subscription.
While the cardholder may make a note to cancel the service before any fees hit their card, it’s not always so simple. Some deceitful businesses hide the terms and conditions of their offers in fine print or use prechecked sign-up boxes as the default setting. Often, returns and cancellations are so strict that it could be next to impossible to stop the deliveries and the billing.
What does this mean for your financial institution?
Most often, there’s a limit on the chargeback rights for these purchases. Your financial institution likely won’t be able to claim fraud and will need to pursue chargebacks through non-fraud reasons, such as “merchandise not as described,” which traditionally has a low chance of success.
Help cardholders avoid these unwanted charges by sharing these tips offered by the Federal Trade Commission. Adhering to these tips when considering a free trial can reduce the potential for unwanted merchandise and charges. Remind cardholders to be smart shoppers by doing their research and reading the fine print before making a purchase.
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