Free trials can be enticing; a new product that brings change or revolutionizes the way we do things. But once that product arrives, it may not live up to its billing. And with many free trials, a consumer can wind up on the hook for unexpected, seemingly irreversible charges. But there is some new help available.

The Better Business Bureau would like to commend Mastercard for its new rules aimed at protecting consumers from fraudulent online sales, commonly referred to as “free trial offer” scams. BBB has received more than 37,000 complaints regarding free trial offers over the last three years. People making complaints lost an average of $186 each.

Deceptive free trial offers can generally be identified by three factors: fake celebrity endorsements, extravagant product claims, and a hidden subscription agreement that locks consumers into automatic purchases beyond the “free” trial. Most of the complaints allege the customer signed up for what they believed to be a free trial of a product (paying only a small fee for shipping), only to have the company charge them when they didn’t quickly cancel. Often the customer was unaware they had to cancel anything, or the company made it difficult to do so.

In making the announcement, Mastercard said, “We want every commerce engagement to be simple, safe and secure and we are introducing rules for merchants that offer free-trials to make this a hassle-free experience for their consumers. The new rules will help increase transparency and ensure an outstanding experience for cardholders.”

Those new rules by Mastercard include:

  • Companies must get customer approval at the end of the free trial before billing begins.
  • Companies must tell customers the price, payment date and instructions on how to cancel before billing begins.
  • A receipt must be sent to the customer for each payment, and it must include instructions on how to cancel the service.

BBB believes the new policy will help consumers who didn’t realize they were signing up for a subscription. It will also give them information they need in a timely way to decide whether to continue purchasing the product at the regular price.

The new policy affects only customers who make their purchase with a Mastercard. It is not clear if other major credit card companies will follow suit.

For more information on free trials go to bbb.org. For information on how your bank or credit card company handles these types of purchases, contact that company directly.

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