Who doesn’t like free stuff? Unfortunately, criminals know the allure of “free” and use it to get people to commit to trials for products or services they really don’t want or need. Before you know it, you’ve been roped in and start receiving an endless slew of products you never really wanted.
What’s worse, many of these scams target older folks who might not realize that they are being automatically billed for these useless products. Here is what you need to know about free trial scams and how to protect yourself.
A “free trial” scam offers a person some sort of free product or service. Once you agree to the trial, the criminals sign you up to join a weekly or monthly club or subscription program, with or without your consent. Any number of products may be offered through these models, including:
Sometimes by accepting a free gift, you are agreeing to enroll in a club and receive more products. You will continue to be billed before you cancel, or you may be agreeing to a subscription that automatically renews each year.
In one example, the operators of an online subscription scheme agreed to settle a complaint from the Federal Trade Commission (FTC) for $74.5 million after it was alleged they lured consumers into a free trial offer for cosmetics and dietary supplements and then enrolled those people in subscriptions without having their permission.
While anyone can be targeted by these scams, older individuals more often fall for such schemes. The Consumer Financial Protection Bureau (CFPB) states that financial institutions reported more than $6 billion in suspected fraud losses over a recent five-year period. According to the CFPB, older adults aged 70 to 79 lost an average of $45,300 due to financial fraud.
Boomers are often targeted by financial fraudsters for a number of reasons, such as:
Some of the free trial offers are perpetuated on social media, through texting, and the use of other mobile apps. For example, The U.S. Sun reported that a popular scam offering “free trials” of Netflix was being advanced by sending hundreds of thousands of social media, text, and WhatsApp messages.
These messages promised three months of free Netflix streaming because of the coronavirus pandemic. It is believed that once recipients click on the link included in the message, scammers are able to hack into phones and get personal details.
Law enforcement agencies have received an increasing number of complaints regarding these senior financial scams and free trial offers. Complaints to the FTC more than doubled between 2015 to 2017.
Victims of just 14 resolved FTC cases lost $1.3 billion. Additionally, the most recent data for the FBI’s Internet Crime Complaint Center shows nearly 2,500 complaints regarding free trial offers, totaling more than $5.6 million in losses.
Several national and international law enforcement agencies have issued consumer warnings about these offers. They are also asking the public to report bogus products to them to help further combat the fraud. Some states have responded by passing special laws that prohibit auto-renewals.
The best way to protect yourself from becoming another victim of a senior financial scam is to be proactive. Here’s what you can do:
The famous saying goes like this: “There’s no such thing as a free lunch.” While the free offer may seem enticing, it usually has strings attached that are worth way more than the “free” thing you were offered.
If you are still considering doing business or accepting the free product, thoroughly research the company online. If you spot stories from customers about being charged without their permission, you know to avoid these offers.
Be sure that you understand all of the terms and conditions of any such free trials, including how to cancel, when you will be billed, and how much time you have to reject products.
Some of the offers online may automatically check a box that allows the company to keep sending unwanted products and to bill you if you don’t uncheck it.
Since you might not get your credit or debit card statement until more than 30 days after some transactions are processed, limit this gap by enrolling in online banking. This way, you can quickly see if a company is charging you for an unwanted subscription or membership.
You can go a step further by setting up automatic alerts on your account to let you know when you have been charged for something.
If you receive an offer from a stranger or even a friend through email, avoid clicking on the links included in it. This can be a phishing scam. This kind of email may contain links with viruses that can corrupt your device or may send you to a phony site to store your personal details.
Knowing about these free trial scams and what might make you or a loved one vulnerable is the first step to protecting yourself online. The strategies listed above can help you avoid these scams and help you keep your hard-earned money for yourself.
Have you heard of ‘free trial’ scams? Or perhaps you’ve seen them for yourself? What service or product was offered to you? How did you respond? Please share your story.