Sept. 5, 2024
You know that free trial offer you signed up for, and then got charged for? That's called "free trial fraud"--when you're offered a good deal, then charged extra fees or subscribed to automatic payments, leaving you on the hook when you didn't expect. In this blog, I'll describe how free trial offers work, what red flags to look for, and ways you can protect your money from fraudsters, so you can recognize free trial scams, keep your money safe, and enjoy trial offers without having to worry about getting duped into being billed.
Free trial scams are a big deal that impact people who are trying to catch a break. It's an umbrella term for all kinds of sketchy marketing that lures individuals in with the promise of a free trial. Once they've "tried" the "free" product or service, it turns out it wasn't actually free at all. They end up paying for a bunch of extras.
Credit card info is the common factor in most free trial scams. They want your card number in order to lock you into the "free" trial--really it's to sign you up for a subscription you probably didn't want. And for many, it doesn't stop there. They end up signed up for many other services they never meant to pay for. But scammers know that consumers won't read the fine print, so it's easy to catch them.
But the psychology of this scam is a big deal. Who wouldn't want free stuff? It's a strong urge. Who wouldn't want to taste a new product or service without consequence? But there's consequence--the fine print--hidden in the sales pitches. And because of that, they can sign people up without ever having to disclose the most important thing. The "free" part is what makes people stop and take notice and the part the scammers count on to get them to skip over the details.
The process for cancelling subscriptions is even shadier. People who want to opt out have a hard time, and have to work really hard to cancel. It's a pain, and it's on purpose in order to prevent people from cancelling. What should be an easy opt-out can turn into a real frustration, and this is what people mind most of all.
Most importantly, free trial scams tend to withhold what you're actually signing up for, pre-check boxes to sign you up for more, and have really tiny cancellation information. All of which are meant to make it hard to understand what you're signing up for. By withholding information and obscuring the fine print, scammers deceive many consumers into agreeing to things they'd never agree to otherwise. This lack of transparency is why consumers need to be cautious and ask questions when they see "[free] trial offers](https://www.fcc.gov/scam-glossary)."
The key to avoiding free trial fraud is to be cautious and ask questions. Educate yourself on how these scams typically work and what to look out for with subscription traps. Ask questions about offers and don't give out personal information until you understand why it's needed. These are the most effective steps to safeguard yourself against scams.
Free trials seem like a good idea because you can test out a product or service before you spend any money. But free trials are a bit of a con because there are many types of free trial scams—and in all cases, they end up costing you money in the end.
We're going to examine the various types of free trial offers so you can keep your wallet safe.
The top piece of feedback we hear about free trials is that people get charged when they forget to cancel their trial and get converted to a paid customer. When you initiate a 'free' trial, you're often agreeing to terms and conditions that include an auto-billing clause. So if you don't actively cancel your subscription during the trial period, you're going to get charged regularly after that! People often feel blindsided when this happens and they'll complain about being charged unknowingly weeks or months after they forgot about the trial they thought they canceled. Consistent consumer complaints led to losses totaling nearly $1.4 billion because they didn't read the terms and conditions that include how you can cancel and by when you need to cancel. Companies prey on that lack of transparency and will highlight the "free" and not the consequences of doing nothing. So people get unwittingly locked into a subscription they didn't want.
Negative option marketing is the practice of a company assuming you want to continue paying them, unless you tell them otherwise. It's a ploy that only works because most people will forget to cancel after the trial period. Plus, since many had signed up under the assumption of no risk in the first place, the ongoing billing becomes a trap. And cancelling? It's not just difficult—neg option programs are frequently paired with unclear disclosures and pre-selected options that make cancelling even more difficult. You might think you successfully shut down a subscription, only to find out months later that you've actually been charged all along. It's this kind of system that fuels a lot of the discontent around subscription products. Being aware of these schemes can help protect you from this type of practice—and sign up for trials only when it really makes sense for you, without being taken in by any financial fraud.
Another, even more insidious type of scam is the counterfeit celebrity endorsement. By leveraging recognizable names and faces, scammers make their fake free trials appear more credible and appealing, so consumers are less likely to question their authenticity. That's why you'll see deceptive testimonials from figures like Oprah Winfrey, Dr. Oz, Shark Tank, etc. for fake "one weird trick to lose weight" or "one weird trick to reverse type 2 diabetes" offers. But the thing is, those deceptive testimonials are leading people into free trial signups they'd probably avoid if not for the implication that a trusted public figure approved them. When people perceive that they're buying something that a celebrity has endorsed, they won't be looking for red flags. Scammers prey on this lack of vigilance, designing ads that look like a positive choice, and the consumer is actually making a predatory choice.
Here's a scam. They'll make cancellation so inconvenient you just never do it. They'll hide it under so many steps, and you have to phone a number, and you have to login to a website, and then you have to phone another number, and then go back to the website and then login with a different username and password, and so on. And they'll put a psychological layer of difficulty on top, a psychological barrier. Because most people are good people who don't want to steal. They'll feel like they "shouldn't" cancel, and that they "should" give it another try. But they won't cancel for those reasons. Scammers will count on you not cancelling, so they'll load up on as many tricks as they can to keep you from cancelling. It's a great system for them, this scam, because it's a win-win for them. If you do go to all the trouble to cancel, they've already billed your card a bunch of times. If you don't, they'll keep billing you. They make money off you either way. Any legitimate business would just let you cancel easily, but the scammers don't want that.
Freemiums also muddle the distinction between an actual free trial and a subscription. By and large, companies will offer freemiums as a tool to give customers a limited sample of what the product can achieve. But there are also "strings attached" freemiums, and it is in this gray area that those in pursuit of "free" may end up paying. For example, a product might have a free version, and also a premium version which offers more. If you're eager to experience the benefits of what could be a fantastic product, it's easy to overlook the fine print that it will only be free for a short time. You may see charges on your credit card that you didn't see coming. That you didn't budget for. So, being able to distinguish and keep a record of your subscriptions is crucial for avoiding unnecessary bills.
To safely navigate free trials, consumers must understand and be knowledgeable in all of these scams and how they can manipulate us. Understanding and undeterred, we can protect ourselves.
Free trials sound good in theory, but in reality, the offer often comes with "gotchas" that can lead to surprise charges. Fraudsters use free trials to trap consumers into a purchase, then add on other costs that consumers didn't agree to. That's what happened to a lot of people in the well-known LinkedIn case. They were unknowingly billed after signing up for a trial membership, often without clear notice or disclosure. Those additional costs are what scammers are really after in offering a free trial in the first place--to get you to sign up, so they can get you to pay.
The Federal Trade Commission (FTC) is going after the people who sell free trials of skin care products (yes, the ones with hidden fees and impossible-to-cancel subscriptions). People who've been caught by these scams report that, after they signed up for what they thought was a free trial, they were charged fees that weren't part of the initial offer, making it nearly impossible for consumers to cancel that subscription, and they often feel stuck.
Other fraudsters use misleading advertising to promote their offer. The ads pitch the product or service, but don't tell you about the free trial. For example, if you see an ad for a miracle health supplement, the ad makes it look great, you want to give it a go--and oh, by the way, turns out you're being charged every month for it. By withholding the details that consumers need to avoid obligations, they're essentially getting consumers to buy something that they wouldn't have bought had they known they were going to be billed for it to begin with, and so get hit with surprise charges.
In addition, people were charged more than $100 following a health supplement trial. Consumers think they're getting a product for free or almost free, but in reality they're paying a lot more once the trial is over. Surprise charges and automatically enrolling in subscriptions are all too common when it comes to free trials, and you might find yourself hit with a surprise bill.
You don’t have to, but it’s possible to go to the Better Business Bureau website and check the number of complaints yourself. For example, in 2016, the Better Business Bureau received 1 complaint, and in 2017, they received 201. You don’t want to be one of the 201 that got scammed in 2017, do you? Or one of the 58,400 that got scammed in 2019.
Fraudsters love deceptive advertising to trap their victims. That might mean hyping up what their product can do. That might mean stealing a celeb's face and name to get you to buy in. All to make their offer appear legitimate, and you can't tell the difference between what's real and what's a scam. For example, you could fall for a clickbait ad featuring a celebrity influencer promoting a health product without even realizing it, and now you're in a subscription nightmare and paying every month.
Customers have a hard time cancelling their subscription even when they know they're being scammed. Scammy companies tend to make cancelling very difficult. Long phone trees, unresponsive customer service reps, and unclear website instructions only make it harder. Customers tell us they feel like they'll never be able to reach a real person for assistance, leaving them feeling even more powerless when trying to dispute these charges.
The world of free trial fraud... what a disaster! There are 1's for days, 1's in people's reports over the years, 1's in the number of dollars the government has gone on record losing (in the $1.3 billion) due to those businesses. And with few regulations that are always a step behind the latest scam, anyone could be a target if they're not careful. Because it's everybody from everywhere writing in, everyone should know about "free" deals and what to watch out for before they sign on the dotted line or agree to anything.
We need to come together as a community. It's time to know more about how it works so we can all help shut down free trial fraud once and for all! Only education can be preventative and give would-be victims a fighting chance.
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A free trial is the best way to help your product shine, because it gives users a chance to experience your product in their own hands, using their own words, determining for themselves what your product actually does, how they can use it themselves, and how much it's worth to them. And when they're able to do all that, they're also able to feel 100% confident that your product is the perfect choice for them.
For example, in the software industry, providing a free trial can lead to higher conversions because the people who do use the trial period see the product performance for themselves and are more likely to become paying customers. This also generally leads to high satisfaction and often times customer loyalty as users become more and more comfortable with your product.
FREE TRIALS ARE GOOD FOR LOTS OF STUFF.
Another big thing about free trials is that it's a way for your users to tell you what they think. And what they think is important info for any product because that's how you make your product better.
You'll want to have ways to get user input during the trial (like surveys, interviews, etc). And then that input is what you'll use to improve your product. Or maybe it'll give you ideas for what new things to build to appeal to users in the future. So free trials don't just get you users, they also help you make an easier to use product people will love.
Free trials come with a lot of advantages, but the drawback is that a lot of people just don't convert. It might be for a million different reasons—they didn't feel enough pain to use the product, they were not engaged users in the first place, or they just have a "grass is always greener" mentality. Companies should not be doing free trials unless they're getting guaranteed return; otherwise, it's a waste of money.
Companies will have to look at their conversion rates and determine if the cost of free trials is greater than the benefit of when they do convert. They will have to build strategies to increase conversions, such as targeted follow-ups, special offers, or higher spend on marketing at the end of the trial to recapture intent from the user.
Also, watch out for abuse—people signing up who have no intention of ever buying. Some people take advantage of the free trial model and use your service the whole time with no intent of purchasing. So you're paying for it and not getting anything.
To combat this, companies make their trials "credit card required" or limit features available during the trial. With a well-structured trial that's hard to abuse, companies can protect their bottom line while still letting real users see the value.
The other big thing is how hard it is to cancel. If they make you jump through hoops to cancel your trial, or you accidentally sign up for a paid plan without sufficient warning, you'll be annoyed. And you'll tell your friends and generate bad word-of-mouth that can cost them potential future customers.
To avoid this, companies should make it easy to cancel. They should tell you how and when you can cancel, and they should offer an easy way to do so. That way, customers won't be as annoyed and will trust them more. With a good customer experience during and even after the trial, companies can maintain a positive relationship with trial users even if they don't continue with the service.
Free trial fraud can be a real minefield, and it can be hard to tell if something sketchy is going on. But you can steer clear of surprise charges and other issues if you follow some helpful guidelines. A lot of it comes down to knowledge, so you know what you're getting into and can confidently cancel when you need to. Here are some tips to help you reduce your risk of free trial fraud.
Don't guess. Just put a number: in your output.
When you reach the checkout of an ecommerce site, it's important to proceed with caution, ensuring that there aren't any checkboxes that are "pre-checked" for you, automatically signing you up for more stuff. It's a common practice among ecommerce companies to try and pad their sales with little to no gain for the consumer. Make sure to review the entire checkout page to avoid accidentally signing up for (and paying for) something you didn't want.
By unchecking these boxes manually, you are able to control what you are signing up for and what you are likely to be charged for. Remember, every box that is checked is a commitment to pay, and a little care at checkout can save you from expensive charges later on.
To prevent surprise charges, it's a good idea to set a reminder in your phone to cancel before the trial period ends. We're all busy and it can be hard to remember, so it's a good idea to set an alarm on your phone or calendar. For example, if you sign up for a 30-day trial, I'd set an alarm on day 28, or even a week before.
These reminders also serve as a good check-in to see if the service is actually useful for you. If it is, keep it. If not, you're already set up to easily cancel without the headache of a missed timeline or unauthorized charges.
Checking reviews before you sign up for a free trial can help you avoid a scam, where people say that it was impossible to cancel, or that they got charged unexpectedly. It's all about consumer knowledge, because people who've been there before can steer you away from (or, more rarely, let you in on) a company's pattern of sneakiness.
You can also search on forums or Twitter, Facebook, etc. to see what people are saying about the service. A company with nothing to hide will have overwhelmingly good feedback, and a company that is being deceptive will have a lot of bad feedback. This can help you avoid companies with a bad reputation.
Once you’ve signed up for your free trial, you’ll want to monitor your credit card and bank statements closely. If a company doesn’t respect the cancellation or pulls a fast one with an auto-renew, you may see unauthorized charges on your statement. The sooner you spot these, the sooner you can dispute them and get your money back.
Check your statement at least once a month, twice a month if you’re a money management late-bloomer like me. If you see any charges you didn’t approve, dispute them with your bank or credit card company immediately. Hang onto those emails or screenshots of your cancellation and your written record of communications with the company—these will serve you when you dispute the charges and stand up for yourself as a consumer.
This safeguard empowers you to use free trials to your benefit without worrying about someone taking advantage of you. Equipped with the right information and the action steps you can take, fraud and the financial consequences will be the furthest thing from your mind. Monitor your financial statements for any unauthorized charges.
There's no such thing as making up numbers. Don't include numbers like: 1. Only include the numbers in the output.
Free trial scams are a type of sneaky marketing. They give you a "free trial" of something, but are cagey in the fine print, need your credit card up front, and then after the trial is over they'll start charging you. They'll charge you $1 here, $2 there, and then you'll wonder why you're paying $50/month to some company you've never heard of.
Some common tactics are to make users put in their credit card information to "secure" a trial, to use negative option marketing so you're assumed to have consented to future charges, and to use fake celebrity endorsements to build trust. A lot of scams also use complex cancellation processes so you won't easily be able to quit the subscription.
Scammers obfuscate the process to cancel something. They throw in extra steps that could be an overly long phone tree or unclear instructions on their website—all of which make it hard for people to actually cancel, so they get frustrated or lost and give up, and end up stuck in a subscription they never wanted.
To protect yourself, always read the terms and conditions before signing up for anything, watch out for pre-checked boxes that could accidentally opt you in for something you don't want, set a reminder to cancel, google the company to make sure they're not sneaky, and frequently check your statement to ensure there are no unauthorized charges.
Read the terms and conditions, where you'll often find key information about how to cancel and whether there's an auto-renewal clause. And when you know how, you can make informed choices. Put it into practice and know how to sail through that free trial like a pro and not get hit with unexpected charges.
Reports + stats show that complaints about free trial scams have skyrocketed in recent years, and regulatory agencies have reported millions of dollars lost by consumers. The increasing numbers of complaints suggest that consumers are becoming more aware of these deceptive practices, and it's high time they did.
Free trials can boost conversion rate because customers can try before they buy, becoming deeply invested in the product. But if you don't manage them well, you might have a low conversion rate on your hands—and you'll lose a lot of money. Plus, customers who are just in it for the free stuff can really hurt your profitability.
Celebrity endorsement scams exploit consumer trust—when products are associated with familiar names, people are more likely to think the deal is on the level. They fall for it, ignore red flags, and end up billed for subscriptions they'd have never signed up for otherwise.
An individual examining a deceptive online offer related to free trial fraud.
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