You’ve probably seen infomercials touting free trial offers, or you’ve been bombarded by ads online offering a free sample of the latest weight loss miracle pill, acne cure, or anti-wrinkle cream. It sounds good because the offer is supposed to be “risk free,” or at least that’s what the ad says.
Unfortunately, when you finalize your order and give your credit card number to pay the shipping fee, you’re agreeing to a whole host of charges that are buried in the fine print. This is known as “negative option billing,” in which you sign up for ongoing shipments of whatever product you’re trying. If you don’t notice this fact and call to cancel, that “free” product will be very expensive. You’ll get box after box delivered to your doorstep, and you’ll be expected to pay for it all.
Negative option billing is one reason I never order anything via a toll-free number I see on an infomercial or through an online ad. I know that once the merchant has my credit card number, it can bill me for whatever it wishes, and it’s up to me to prove that I didn’t agree to those charges. The agreement is generally hidden in the fine print on a website or an unobtrusive pre-checked box that most people don’t even notice. For phone orders, the fast talking operator slips it in as he or she quickly rambles out the terms of the terms of the sale, running the words together so you can’t quite understand them.
Sure, you’re supposed to be able to unsubscribe from whatever autoship program you signed up for to get your free trial, but the companies make it as hard as possible. Good luck finding the correct phone number to call, and then you have to actually get someone on the line. If you do, he or she will bombard you with counter offers designed to keep you from cancelling. Even if the agent does finally agree to cancel your subscription, it might not really happen. You won’t know until you see even more charges on your credit card bill.
I find those business practices bad enough, but then there are companies that tack additional subscriptions on top of your initial purchase. They enroll you for worthless memberships to things like travel clubs and coupon websites or subscribe you to enough magazines to fill a library. Once again, this is all buried in the fine print. The original company gives your credit card number to these affiliates so they can bill you at will.
Even if you call to cancel one of these unwanted subscriptions or services, that doesn’t mean the others are cancelled, too. You must usually call a separate telephone number for each item you want to cancel.
How can you protect yourself from ordering something supposedly for free and having your credit card nearly maxed out? As I mentioned earlier, I personally won’t buy anything from an infomercial or a potentially scammy online ad. That personal policy keeps me safe.
You can buy most legitimate infomercial products in stores like Walgreens or Target. That’s where I get them because I can easily return them if they don’t work as promised. These products are often available on Amazon or eBay, too, and I don’t mind ordering them through those trusted sites.
You won’t find more the questionable items, like weight loss potions, in bricks and mortar stores because the manufacturers don’t want you to have a place where you can easily return them. If I’m interesting in something but can’t buy it locally or through eBay or Amazon, I know it’s probably not worth ordering.
Here are a few more tips to avoid getting into trouble with negative option billing:
1) If you want to try out a free trial offer, use a one-time credit card number. Some banks let you generate a special credit card number for one-time use that’s limited to a certain amount. The merchant never knows your real credit card number.
2) Read every word of the fine print if you order online. The negative billing option and other memberships and services are hidden as deeply as these companies can bury them. They don’t want you to know what you’re agreeing to because they know you’d likely cancel the order if you realized how much you’ll actually be billed.
3) Take screen captures of every order page. If you get socked with charges and don’t believe you agree to them, you can dispute them with your credit card company. However, the merchant will likely counter your argument with claims that the charges were clearly disclosed. Screen captures let you prove your point if you don’t feel there was adequate disclosure, and they can help you win your claim.
4) Record phone conversations. Tell the agent up front that you’re recording the call if you order an infomercial product over the phone. Most companies record these calls so they can fight you if you file a dispute. Turn the tables and make sure you have your own recording to prove whether or not a clearly understandable disclosure was made. If the agent refuses to let you record the call, don’t make the order. The only reason to say no is if the company has something to hide.
Negative billing options aren’t illegal, but they often stray into murky ethical territory. Stay alert and avoid becoming a victim of this shady billing practice.