Is Free REALLY FREE?!
If a company offers a “FREE TRIAL” then charges the consumer not only for the cost of shipping, but also for the cost of the product, it is NOT FREE!!! Unfortunately, many companies use “negative options marketing” to deceive consumers by illegally signing them up for ongoing monthly subscriptions plans without their consent.
Recently, the FTC shut down such a company that cheated consumers out of $74.5 million with their “free trial” offer. “The FTC alleged that the defendants used deceptive websites to charge consumers for both the “trial” product and ongoing monthly subscription plans. The defendants claimed consumers would have to pay only a small shipping and handling fee for the trial, while hiding the actual cost. After two weeks, the defendants charged consumers $90 for the trial product and enrolled them in unwanted and costly negative option subscription plans.”
Negative options marketing is described as “… which the absence of affirmative consumer action constitutes consent to be charged for goods or services.” In order for Negative options marketing to be legal, it is required to have consumer consent before billing.
Best business practice is to have all marketing be legally compliant with both, Advertising and Privacy Laws at all times. Being legally compliant with Advertising, Marketing and Promotions Law could minimize legal risks and hefty fines from false and misleading advertising lawsuits or challenges.
Friendly reminder: Substantiation + transparency = TRUST! Having legally compliant marketing campaigns builds trust. Any question?
Feel free to contact me. https://calendly.com/audrey-advertisinglaw/30min
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