Thrifty Spending: Issue 55

FEATURE ARTICLE:  Could Free Trial Offers Be ‘Fee’ Trial Offers in Disguise?

Free trial offers can be an efficient way to sample a new product or service without paying for a membership, subscription or extended service contract. Sometimes, though, if you accept a free trial offer and don’t cancel on time or according to the stated policy, you may be unintentionally agreeing to a contract to buy additional products and services.

The Federal Trade Commission (FTC), the nation’s consumer protection agency, says “try before you buy” offers can be effective ways to market. If you like what you try, you may want to go ahead and make the purchase. But if you don’t want to buy the product or service, you may need to cancel or take some other action on a particular timetable to avoid being charged.

When a company takes your failure to cancel before the end of the trial period as permission to continue billing you, you’ve made a “negative option” purchase. Sometimes, unscrupulous merchants make it tough for consumers to take the action that would prevent negative option billing: these merchants may hide the terms and conditions of their offers in teensy type, use pre-checked boxes as the default setting, and put conditions on returns and cancellations that are so strict it could be next to impossible to stop the deliveries and the billing.

Whiter Teeth? Flatter Stomach? Shiny Hair?

If you see a free trial offer online for a product you’re interested in, stop – and read the details.

Find the terms and conditions of the offer. If you can’t find them or can’t understand exactly what you’re agreeing to, look for another merchant. You don’t want to commit to recurring charges for products or services by mistake – or before you’ve tried them and made your decision.

Pay attention to pre-checked boxes. That check may bind you to terms and conditions you’re not comfortable with – or ready to accept.

Look for information about how you can cancel future shipments of merchandise or services if you don’t want them. Do you have to pay? Do you have a limited time to respond? If you’re not satisfied with the information in the offer, look for another one that meets your needs.

Read your credit and debit card statements very shortly after you’ve responded to a free trial offer – and often afterward – looking for charges you don’t recognize or didn’t authorize. Contact the merchant first to try to resolve the issue; notify the card issuer promptly if you see any unusual or unauthorized charges.

Reprint of FTC article 2010

MONEY SAVING TIP:  Tune it up.

Your vehicle will not only thank you for treating it to routine tune ups, but you will also reap the financial benefits.  Oil, air filter changes, the correct tire pressure, all of these things keeps your car running efficiently reducing the amount of gasoline it uses to run.  It will also prevent from high costs of repairing your car from poor maintenance.

DID YOU KNOW…that if you co-sign it becomes your debt? Before you answer someone’s request to co-sign, make sure you understand what co-signing involves.

  • You are being asked to guarantee this debt.  If the borrower does not pay the borrower does not pay the debt, you will have to. Be sure you can afford to pay if you have to and that you want to accept this responsibility.
  • You may have to pay up to the full amount of the debt is the borrower does not pay.  You may also have to pay late fees or collection costs, which increase this amount.
  • The creditor can, in certain circumstances, collect this debt from you without first trying to collect from the borrower.  The creditor can use the same collection methods against you that can be used against the borrower, such as suing you, or garnishing your wages.  If this debt is ever in default, that fact may become a part of your credit record.
  • When you cosign a loan, your ability to borrow is reduced because your personal debt load has increased.

Studies of certain types of lenders show that for co-signed loans that go into default, as many as three out of four cosigners are asked to repay the loan.  When you are asked to cosign, you are being asked to take a risk that a professional lender will not take.  If the borrower met the criteria, the lender would not require a cosigner.

In most states, if you cosign and your friend or relative misses one payment, the lender can immediately collect from you without first pursuing the borrower.  In addition, the amount owed may be increased by late charges or by attorney(s) fees if the lender decides to sue to collect the debt.  If the lender wins the case, your wages and property may be taken.