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 Better Business Bureau (BBB), however, finds that many of these free trial offers are not free. 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 at us.bbb.org/freetrial.
Many free trial offers come with fine print, buried on the order page or with a link that gives consumers only a short period of time to receive, evaluate and return the product to avoid often being charged $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 (FTC) 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 faked. 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 these endorsements are not real.
“Free trial offers relying on deception have infested the internet, especially with social media,” said Jim Hegarty, president and CEO of the BBB serving Nebraska, South Dakota, The Kansas Plains and Southwest Iowa. “Those running these scams are counting on consumers to be so dazzled by celebrities and big promises that they fail to read the fine print. It’s imperative that consumers read the terms and conditions of such offers 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 is growing every year!
Available FTC data shows that complaints about “free trials” more than doubled from 2015 to 2017, and 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 (IC3) from 2015 to 2017 shows a fairly even spread of age ranges, BBB reports show that 72 percent of victims were female, most likely because many free trial offers involve skin care products geared toward them.
One Omaha woman reported that she saw an article on Facebook about a UCLA student who discovered an excellent way to lose weight by using a product called Garcinia Cambogia. She thought it would be worthwhile to get a free sample by paying $4.95 for shipping, so she entered her credit card number. She saw no terms or conditions.
She tried the pills for a few days and said she didn’t notice any results. She then received a second bottle of pills in the mail and thought it was a mistake, so she emailed the company and was told to call customer service. After spending 40 minutes explaining that she did not want more pills and wanted her money back, the operator told her that “you accepted the terms, and there is nothing we can do.” They told her that the company could end her “membership” and stop shipping more, but she could not get her money back. She lost $184.
She went back to the web page where she had placed her order and saw that the conditions of the trial and continuing shipments were mentioned in fine print on a gray background. She says she would never have provided her credit card information for the trial if she had seen the terms before purchasing.
She talked to a representative from her bank, who said there wasn’t really anything they could do. She complained to BBB. She also found and joined a Facebook group with almost 1500 members called “STOP GARCINIA CAMBOGIA FREE TRIAL SCAM.” She says that many of the experiences discussed in the group are very similar to hers.
FTC data on free trial offers strongly suggests 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 (CAFC) found that the credit card transactions at the center of the scam were processed through banks in 14 countries.
The report recommends:
• BBB urges credit card companies to do more to ensure 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 be helpful if they could do more to educate their customers.
• Additional criminal prosecutions of this conduct are needed. The FTC and 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 law 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 BBB.
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 www.bbb.org
• Report the fraud to www.bbb.org/scamtracker
• Report it to Federal Trade Commission (FTC) or call 877-FTC-Help
• Report it to Internet Crime Complaint Center, or IC3
• In Canada, report it to Canadian Anti-Fraud Centre (toll-free from the US at 1-888-495-8501) and to the Competition Bureau.
• Report suspicious, confusing or misleading ads to BBB Ad Truth.
