When Jenny Tang paid 95 cents (U.S.) for an online search, she didn’t realize the purchase would cost $300.
She spotted PeopleSmart, based in Omaha, Neb., when typing in “cell phone reverse lookup” on Google. She paid with her credit card, as required.
The confirmation email said she was getting a one-month unlimited search membership with a seven-day free trial. But she failed to spot an important sentence in tiny print at the bottom.
“After your trial period, you will be charged $19.95 for your PeopleSmart membership and it will automatically renew upon expiration at the same price every month unless cancelled,” it said.
Tang scanned her credit card statements afterward, but looked mainly at larger purchases ($30 or more).
“PeopleSmart’s amounts were inconspicuous and I didn’t see them more than a year,” she says. “The charges were not the same from month to month because they were converted from U.S. dollars.”
The company gave a one-month refund, but refused to cover the rest. It said the rules were disclosed by email and a payment policy shown online.
The bank that issued her credit card refused to help, saying she was on her own.
Negative option marketing is a time-tested tactic, in which companies send you unsolicited goods and make you pay until you cancel them. Ontario has banned this practice since 2005, but retailers outside Canada may use contracts that negate consumer rights you thought you had.
Many people fall for the free trial scam. They order samples of skin creams, vitamins or teeth whiteners and agree to pay a small shipping cost.
Some companies also bind you to an expensive monthly subscription, charging hundreds of dollars before you turn off the shipments. I’ve heard several such stories in the past month.
Judy ordered a two-week supply of trial-sized cosmetics from Stemologica and Beautemer, using a credit card to cover the $6 shipping charges. She was in hospital when the package arrived and didn’t pay attention.
A month later, she found a $169.95 charge for one and a $179.98 charge for the other on her Visa account.
“I called the skin cream company about a mistake,” she says. “I was told that because I hadn’t returned the products or cancelled my account, they had billed me for the products I had already received.”
Louie ordered trial sizes of a tooth bleaching agent, Blizzard White, and paid $6.50 for shipping. A few weeks later, his Visa bill showed a charge of $253.88 in Canadian dollars.
The company in Arizona said he had only eight days to decide if he wanted to keep the sample or return it. Since he hadn’t replied, he had been billed for two more shipments (not yet received).
Sandra ordered samples of a diet product, made famous by TV host Dr. Oz, from Pure Cleanse. She, too, was billed twice for a total of $253.88.
“I called their customer service number, only to be disconnected many times or to stay in the loop and never connect to a live person. They said they would contact me. It hasn’t happened,” she says.
Gail was billed $359.50 after ordering samples of skin care products from Alvena and Duaderma. Her husband complained to the credit card issuer on her behalf because she had just gone through surgery.
“We were told it would take two to three months to complete a fraud investigation and, to avoid any interest charges, we should pay the disputed amount,” he told me.
Visa and MasterCard have a zero liability policy for unauthorized transactions. American Express has a fraud protection guarantee.
But the policy is open to interpretation. You may find your credit card issuer denies a refund and blames you for not reading the rules, not checking your account frequently or not complaining quickly.
Here’s my advice: Ignore the allure of free samples offered online, especially on Facebook.
If you don’t know a company, do a Google search for its name followed by complaints.
Never give your credit card number without checking the retailer’s online reputation.
Contact your credit card issuer about unauthorized charges. And if you run into resistance from the front line staff, try to reach a higher level. Sending copies to the media can also help.