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'Free' trial offers may come with a catch

In connection with the beginning of National Consumer Protection Week, Minnesota Attorney General Lori Swanson has issued a warning to Minnesotans to be on guard against so-called "free" trial offers that bear hidden terms and conditions.

"In today's marketplace, certain companies use trickery and gimmicks such as so-called 'free' trial offers to sell products with little to no value," said Swanson. "These are products or services that few people would buy in a normal business transaction, so instead these companies claim to give people something 'free,' but hide the customer's obligations in the fine print."

Deceptive free trial offers have become more prevalent on the Internet and in direct mailings recently, and Attorney General Swanson issued the following warning to arm consumers with information, so as not to be victimized:

•Be on guard against free trial offers; they usually have strings attached.

If you're like most consumers, you've been solicited for a "free trial offer." The promoter may try to sign you up by telling you that the promotion is only for a limited trial period and that if you don't like the product or service you will not be on the hook financially. You may not be told that, if you don't cancel within the trial period, you may be on the hook financially for ongoing charges.

Companies often use free trial offers as gimmicks to dupe consumers into unwittingly paying for ongoing monthly charges for products or services of little value. The bottom line is this: Companies are not in the business of giving things away for free, and they only use free trial offers because they want to sell you a paid product or service.

•You usually must opt out to avoid future charges.

Free trial offers are for a limited duration. The marketing company may offer you a 10, 30, or 60 day "trial period," telling you that if you discover that you don't like the product or service within the trial period you will not be financially obligated to pay for anything.

With free trial offers, the fine print matters. Free trial offers often come with a so-called "negative option." Under negative option marketing, the burden is on you, the consumer, to cancel within the trial period. If you don't cancel on time, the seller will interpret your silence or failure to cancel as permission to charge your credit card or bank account, usually for a monthly recurring fee.

•The "free trial" promoter may already be able to charge your account.

In a normal sales transaction where you want to buy something, you must give the seller cash, a check, or your debit or charge card. In other words, you take out your wallet to pay for what you are buying. This often is not true with free trial offers.

Many retailers and other companies with which you do business enter into agreements with unrelated membership clubs or marketing companies to allow them to charge your accounts for purchases you make. In other words, the company offering the free trial offer already has the key information needed to bill your credit card or checking account and will bill you without further approval from you unless you cancel within the trial period.

•Be wary of free trial offers.

Companies are not in the business of giving away their products or services for free. They offer you "free trial offers" for one reason: They want to sell you something and convert you to a paying customer.

Whether it's an Internet pop-up ad or a mailing to your home, read the fine print. Don't sign up for free trial offers for products or services you don't really want just because they are free. There are almost always strings attached with free trial offers.

•Read your bank statements.

Promoters of membership clubs such as travel clubs, buying clubs, etc. often use free trial offers to lure in consumers, as do companies that offer credit protection coverage and other services. These companies often charge consumers' credit cards a relatively low monthly fee - usually less than $20 - so that the amount will fly under the consumer's radar and avoid detection.

Many consumers discover that they have been tricked by a free trial offer when they detect unknown charges on their bank statement. Carefully read your bank statement each month to look for charges for unauthorized or unwanted services.

•If you are billed for unwanted services.

If you find a charge on your bank or credit card account for an unwanted or unauthorized service, you should immediately report it to your financial institution. Your financial institution should undertake an investigation and may agree to reverse the charges, clearing your account on the unauthorized or unwanted charge. You should also immediately dispute the charge with the membership club or other company that posted the charge to your account.

If consumers have questions or need assistance, they may contact the Minnesota Attorney General's Office as follows:

Office of Minnesota Attorney General Lori Swanson, 1400 Bremer Tower, 445 Minnesota Street, St. Paul, MN 55101; (651) 296-3353 or 1-800-657-3787; TTY: (651) 297-7206 or 1-800-366-4812;