"Free" May Just Be Another Word for "Fee"
We all know there's no such thing as a free lunch. But, clearly, many consumers still believe "free trial offers" and "free shopping sprees" are also free. Usually, they're not.
In the past week, I've received two alerts that underscore this point. They involve consumers complaining about unauthorized charges on their phone bills, credit cards or bank accounts. Turns out those charges were probably incurred when the consumers signed up for those delicious, too-good-to-pass-up "free" offers.
Case One: Florida's Attorney General Charlie Crist announced he is investigating a rash of phony $12.95 charges on telephone bills for an Internet shopping service, Email Discount Network. The charges were found on phone bills sent to BellSouth, Sprint, Verizon, AT&T and SBC Communications customers. "These secret charges were placed on bills in hopes that no one would notice," said Crist in a press release. "In this case, someone did notice. and we will investigate it fully."
I called the Florida-based Email Discount Network to find out how these charges could have occurred. Supervisor Kristine Morales patiently explained that most consumers who were charged had agreed to take a survey--for a chance of winning a $1,000 online shopping spree. In the terms and conditions of the survey (which I think most consumers probably never read), there is a $12.95 nonrefundable initial fee, imposed after a 72-hour trial period, unless the consumer drops out and notifies the company by e-mail before then. Then, there's a $14.95 monthly fee for the online shopping service.
Email Discount Network attorney Sean Moynihan added that the company clearly displays its terms and conditions when customers sign up. "If someone chooses to ignore the disclaimers, it's not fair to beat up the company over that," he said. He added that the company "has an extremely low level of complaints;" refunds were granted after complaints were investigated.
Case Two: Consumer Action, a California public-advocacy group issued an alert about a Canadian firm that is selling a free trial of its teeth-whitening products, only to make $106.90 withdrawals from bank accounts of people who ordered the free sample over the Internet. The group said it has received many complaints about "WhiteOvernite. "
Joe Gioeli of WhiteOvernight, said customers need to read the Web site carefully. It says "*Free Treatment," which is not the same thing as "free offer," Gioeli said. "There's nothing free about it, meaning you're going to get something for free. It's an introductory offer" that gives you one free treatment (plus $3.95 for shipping and handling). Consumers need to read the terms and conditions carefully, he said. If they do, they'll note that the asterisk before "free treatment" leads you to the terms saying you will be billed $89.95 plus $16.95 for shipping unless you cancel within 14 days. In fact, if consumers read all the fine print of the terms and conditions, they'll also see: "NOT A FREE OFFER OR TRIAL."
Gioeli said he feels that consumers are taking advantage of his company, signing up for the teeth-whitening product just to win a free iPod being offered by another online site. According to Gioeli, consumers sign up for the product, then immediately cancel the order--even though WhiteOvernight has to pay the original site $50 for each referral. "We feel we're getting scammed. Consumers have to click two boxes saying they've read the terms and agreed to participation and have authorized the charges."
In fact, authorizing the charges for any "free" offer should be a red flag that the offer may not be "free." Any offer that asks for your credit-card, debit-card or phone number is probably not free!
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