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When Free Trials Aren't Free

You can get hit with surprise bills — thanks to a dubious practice called "negative option marketing".

Chances are someone you know has been stung by a free trial offer that turned out to be anything but free. As many as 29 percent of Americans have been victimized by online marketers using a dubious practice known as negative option, according to a recent survey by Visa, the credit card company.

Negative option marketing automatically begins charging for future products or services unless you jump through hoops to cancel a fine-print agreement. Once upon a time, this misleading marketing method was famously used to sell CDs and books, which would regularly arrive in your mailbox and cost you unless promptly returned.

Despite its notoriety, negative option marketing is alive and well on the Internet, used by thousands of online merchants hoping to hook you with offers for teeth-whitening gels, diet supplements, credit reports and even leads to government jobs. Lois Greisman, a fraud expert at the Federal Trade Commission (FTC), estimates annual consumer losses to be in the "hundreds of millions" of dollars.

How They Get You

Negative option marketers employ multiple deceptions to overcome your smart shopper defenses. Many of the websites include bogus celebrity endorsements or — thanks to Internet technology that allows e-merchants to know where you are — testimonials from a "founder" in your home town. Web pages are designed to resemble legitimate news sites and shamelessly weave a tale of half-truths, outright lies and falsified data with the sole purpose of separating you from your money.

Much of the time the e-offerings aren't even very good deals. On Your Side reader Anthony Hartigan of Kenner, La., signed up for a 14-day free sample of anti-aging vitamins, paying — he thought — just $4.95 for shipping. Even before the trial period was up, $90 had been tacked to his credit card for an additional month’s supply.

With our help, Hartigan’s charges were reversed. He was quite chagrined, however, when he saw the identical product on the shelf of a local store for less than a third of the online price.

Protect Yourself

The simplest strategy would be to avoid online free trial offers altogether, except that some of them provide legitimate products at pretty good prices, as well as the convenience of not having to place a new order every time you run out of something. So how do you tell the good offers from the online scams?

Read the disclosures and the customer agreement. Legitimate marketers will have the terms spelled out in plain English without making you hop around the website to read lengthy legalese. If the terms aren’t clear or they don’t sound fair — maybe too short a trial period — or look like you’ll have to jump through too many hoops to get a refund, take your business elsewhere.

Order only when you’re sure. Don’t enter any personal information (name, address, phone number or credit card info) into the website unless you're sure that you want the product according to the terms offered. Many sites collect data as you type, not waiting for you to click the "submit" or "order" button. Unscrupulous vendors may try to charge you even if you may have backed out of an order.

Know the refund policy and document everything. Most agreements have specific terms to cancel and get a refund. If you want to return a product or cancel a subscription, write down times of all calls and the names of the people you talked to. Send all correspondence via certified mail. Then, check your credit card statement to make sure the cancellation goes through and that you don’t have bogus charges. If you do, contact your credit card company immediately. You can also help your fellow consumers by filing a complaint with the FTC.

Ron Burley is the author of Unscrewed: The Consumer's Guide to Getting What You Paid For.