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When a new trash collection company came to town, Angela Cable decided to switch, so she called her current service to cancel. Turns out, the 54-year-old Rock Springs, Wyoming, resident had made a three-year commitment. The fine print also said the contract automatically renewed for another 36 months at expiration unless she canceled it in writing. No problem, she thought; her contract was up in about a month. But buried in the fine print was another provision: “You must give us 90 days’ notice” to cancel. Cable had no clue she'd agreed to that. Negotiating her way out of the arrangement resulted in lots of headaches.
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We've all been there. Contracts are full of fine print that can cost you big bucks. Buried within the language are many legal words and phrases that should serve as a red flag to potential hassles or rip-offs. Here's a list of common phrases in contracts and service agreements that should cause you to proceed with caution.
Before you buy
1. “Free” Nothing is free. If you aren't paying for the product, then you are the product — your information is likely being sold to advertisers who will barrage you with online solicitations. Or, maybe it is “free” now, but you are committing to pay later.
2. “Free trial” It's often accompanied by phrases like “We will not charge your credit card [until 30 days from now].” This enters you into a game of “Will you remember to cancel on the 29th day?” That's a game corporations often win.
3. “For 6 months” Along with the similar “introductory price,” this is a variation of the free trial game. Maybe $39 a month for cable TV sounds good to you in January, but if it's $137 by August, is that really a good deal? Will you remember to cancel in July?
4. “Automatically renews” The zombies of the consumer universe; such clauses mean you keep paying even if you don't realize it or want the service anymore. Sure, if you want the convenience, sign up. (For the record, AARP offers automatic member renewal for those who choose it.) But beware if such an arrangement is tucked in the fine print.
5. “Fees” Consumers rarely compare late payment fees and other penalty charges when shopping, but they should. We all eventually screw up; the cost of such a mistake shouldn't be unreasonable.
Paying with your privacy
6. “Opt out” The phrase means companies can use your data however they wish unless you take a step — you “opt out” — to stop it. Their lawyers know most people just accept the default “opt in” setting. If you go with the product or service, opt out if you don't want them to share or sell your information.