Free trial offers mislead consumers with fake endorsements, surprise charges
By Jane Driggs
The internet is rife with ads and links leading to pictures of celebrities and “miracle” products that promise easy weight loss, whiter teeth, or disappearing wrinkles. You may be enticed to try these products through a “risk-free” trial: Just enter your name, address, and credit card number and the product will be on its way for only a nominal shipping and handling charge. An in-depth investigative study by the Better Business Bureau, however, finds that many of these free trial offers are not free. The BBB receives complaints from free trial offer victims nearly every day and warns consumers to use extreme caution before agreeing to the offer and entering their credit card number.
The investigative study “Subscription Traps and Deceptive Free Trials Scam Millions with Misleading Ads and Fake Celebrity Endorsements” looks at how free trial offers ensnare consumers in so-called “subscription traps” that hook them for expensive shipments of products they did not explicitly agree to buy. It digs into the scope of the problem, who is behind it, and the need for law enforcement and consumer education to address the issue. Read the complete report here.
Many free trial offers come with fine print, buried on the order page or by a link, that gives consumers only a short period of time to receive, evaluate, and return the product to avoid being charged, oftentimes $100 or more. In addition, the same hidden information may state that by accepting the offer, you’ve signed up for monthly shipments of the products and such fees will be charged to your credit card. Many people find it difficult to contact the seller to stop recurring charges, halt shipments, and get refunds. Such obscure terms in these offers often violate Federal Trade Commission and BBB guidelines on advertising as do the satisfaction guarantees that are ubiquitous in free trial offers.
The study found that many of the celebrity endorsements in these ads are fake. Dozens of celebrity names are used by these frauds without their knowledge or permission, ranging from Oprah Winfrey and Ellen DeGeneres to Mike Rowe, Tim Allen, and Sally Field. Sometimes the fine print even admits that these endorsements are not real.
Free trial offers often trick consumers into spending a little money to get a product and then surprise the consumer with unwanted monthly charges. Celebrity pictures and names lure consumers to believe that the products are safe and the business is honest. Consumers must carefully read the terms and conditions of any trial offer very carefully before they take the plunge.
Free trial offers can be a legitimate way for credible companies to introduce new products, provided that the company is transparent about the offer and its terms. However, fraudsters have turned such offers into a global multi-billion-dollar industry that grows every year.
Available FTC data show that complaints about “free trials” more than doubled from 2015 to 2017, and the BBB has received nearly 37,000 complaints and Scam Tracker reports over the last three years, though not all of these complaints involve monetary loss. In addition, victims in 14 resolved FTC cases collectively lost $1.3 billion, and consumers making reports to BBB lost an average of $186.
An examination of the BBB complaints and reports found that victims span all income and education levels while a review of complaints to the Internet Crime Complaint Center from 2015 to 2017 shows a fairly even spread of age ranges. However, the BBB reports show that 72 percent of victims were female, likely because many free trial offers involve skincare products geared toward women.
One Utah woman followed a social media ad for a skincare product that purported to have been endorsed by Dr. Oz and Dolly Parton. She signed up for a free trial offer advertised. In total, she only lost $14, but could have lost over $100. In the end, she was only able to receive a partial refund and could not reverse the charges with her credit card company.
One Nevada man saw an online advertisement for a facial cream that purported to have been endorsed by a celebrity. He signed up for the free trial offer advertised. In the end, he lost over $1,000 and was unable to get a refund. His credit card company reportedly responded to his request as saying, “We have many complaints about Revival Beauty Products — they will not reverse the charges … claim you checked the wrong box.”
FTC data on free trial offers strongly suggest that most such enterprises operate in the U.S. and Canada, though the companies do sell extensively outside the U.S. and frequently employ overseas credit card processing. A 2017 study by the Canadian Anti-Fraud Centre found that the credit card transactions at the center of the scam were processed through banks in 14 countries.
The report recommends as follows:
—BBB urges credit card companies to do more to ensure that victims receive chargebacks where key conditions are not adequately disclosed. Because this fraud is dependent on the use of credit cards, more effort is needed to identify and combat deceptive free trial offers employing credit card systems. Also, it would helpful if they could do more to educate their customers.
—Additional criminal prosecutions of this conduct are needed. The FTC and the BBB have done much to address the issue but do not have the ability to bring criminal charges. Only criminal prosecutions are likely to deter this type of fraud.
—Social media sites should do more to curtail such deceptive advertising.
—International cooperation is needed to combat this fraud. U.S. and Canadian legal authorities need more information about victims from other countries. In addition, evidence and other key information may be located in a variety of countries around the world.
—More consumer education is needed from news media and consumer groups like the BBB.
Here is what to do if you believe you have been a victim of a free trial offer fraud:
—Complain to the company directly.
—If that is not successful, call the customer service number on the back of your credit card to complain to the bank.
—Complain to bbb.org.
—Report the fraud to bbb.org/scamtracker.
—Report it to the Federal Trade Commission or call 877-FTC-Help.
—Report it to the Internet Crime Complaint Center.
—Report suspicious, confusing, or misleading ads to BBB Ad Truth.
Jane Driggs is president and CEO of the Northern Nevada and Utah Better Business Bureau.
