With many people staying at home due to COVID-19 and spending more time on the Internet, chances are they will encounter bogus “free trial offer” scams.
Celebrities, credit card companies and government agencies have since increased their efforts to fight back against such scams.
However, victims continue to lose millions of dollars to fraudsters, according to the release of a December of 2018 Better Business Bureau (BBB) study.
“Subscription Traps and Deceptive Free Trials Scam Millions with Misleading Ads and Fake Celebrity Endorsements“ details the deceptive practices used in free trial offers.
The study found celebrity endorsement ads were used on social media and the Internet to attract consumers to deceptive Web sites that charge a small shipping and handling fee, usually $4.99 or less, for a “free” trial of beauty or health products like skin creams or weight loss pills.
It was found that the true cost of these free trials — ongoing monthly subscription plans — is buried in small print and behind links, if disclosed at all.
The BBB noted that free trial offers are not illegal and video streaming services often offer free trials, as well. However, the bureau said scammers are now using free trial offers to take advantage of the desire for streaming services.
BBB confirmed it has received Scam Tracker reports that scammers are using social media to offer bogus free Netflix services.
The BBB said to receive a fake pass, those clicking on a link may be directed to provide personal information and to send the offer to friends.
The bureau said that scammers are likely phishing for personal and banking information or to distribute malware.
Since the initial study, the BBB has identified the following new trends regarding free trial offers:
- Complaint and Scam Trends: Consumers filed more than 58,400 complaints and Scam Tracker reports to BBB on free trial offers in the last three years. Despite the median loss for victims having dropped from $186 to $140 since the initial study, complaints and reports to BBB have continued to increase. In addition, since many victims don’t complain to BBB or to law enforcement, these numbers represent a trend rather than the total size of the problem.
- Tactical Trends: Previously, free trial offer scams usually sent shoppers to bogus generic news articles or fake Web sites with familiar sounding names to make their pitch. Now they often copy the look of major media outlet Web sites, such as The Today Show and Good Morning America, to increase the credibility of claims about the products. Scammers have also expanded their efforts to use social media to draw in victims, as well as celebrity endorsement theft.
- Law Enforcement Trends: The December of 2018 study noted that only criminal prosecutions and international cooperation were likely to deter this type of fraud. Several actions have since happened, including 23 state attorneys general having urged the FTC to strengthen regulations to combat free trial offer scams, several new cases being litigated, full refunds being issued to victims in a golf/kitchen gadgets free trial offer case and at least one class action case challenging the tactics of a free trial offer scam, citing BBB’s study as support.
- Credit Card Trends: Credit cards continue to be scammers’ payment method of choice for free trial offer scams. Since BBB’s study, Mastercard and Visa announced new policies to combat free trial offer scams. Mastercard now requires merchants to get cardholder approval before billing after the conclusion of the trial. They also must provide receipts, contact and cancellation information. Visa is set to enact similar requirements in April 2020. Both companies continue to encourage victims to dispute questionable charges with the bank that issued their card.
BBB urges consumers to:
- examine free trial offers carefully and resist being swayed by phony use of a well-known name.
- complain to the company directly. If that is not successful, report losses to credit card companies. Victims should call the customer service number on the back of the credit card used to ask for their money back.
- report free trial offer scams to BBB Scam Tracker.
- File a complaint about free trial offers with:
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