Scam Watch: Free trial scams

Published by Rob Goodman on 28 October 2014.
Last updated on 28 October 2014

Free trial scam

It is rare to get something for nothing - and when it comes to 'free' trials, the only thing you're likely to be left with is a hole in your wallet.

At Moneywise, we are regularly contacted by concerned readers who have been ripped off by unscrupulous businesses offering everything from miracle diet pills and face cream to muscle growth supplements, only to have their payment card raided soon after.

In fact, Citizens Advice has reported an enormous 124% increase in the number of complaints about so-called free trials in the past 12 months.

So what can you do to protect yourself? And what can you do if you are a victim? Here's the Moneywise guide to free trials.

How it works

Normally, an advert, in the form of a web pop-up, will suggest customers only need to pay for postage and packaging (P&P) for the goods for a trial period.

But unwittingly when they enter their payment details for P&P, customers sign up for a monthly repayment plan via a continuous payment authority (CPA) that allows the business to withdraw cash from their account every month without the customer realising.

A CPA is used by millions of people to make regular payments – such as a gym membership or mobile phone bills – via their debit or credit card each month.

But with these free trials, often the terms and conditions of what the customer is signing up for are buried in the small print – if there are any at all – so many customers don't know they are agreeing to a CPA, leaving them shocked when they check their card statements.

Add in the difficulty consumers face in contacting the companies when they realise they have been duped – especially if the company is based overseas – and it's easy to understand why these scams have become so problematic.

Gillian Guy, chief executive of Citizens Advice, warns: "No company should be advertising slimming pill trials as free while burying the high price and nature of the contract in lengthy terms and conditions.

"It is often difficult for people to get money back even if they feel misled because the extra payments were not clear. The small print should be easy to understand, so consumers know exactly what they are signing up to."

What to do if you get stung

When customers realise they have been ripped off, it's understandable that they start to panic. Many victims can't afford to lose sizeable sums unexpectedly and the situation is compounded by the problems customers have in tracking down these companies to complain.
David Hinde contacted Moneywise asking for help after he had been scammed by a free trial.

Earlier this year, he signed up for a trial with a company called Testocore that sells men's health supplements.

Two weeks later, he found that the firm had tried to withdraw £94 from his account after he'd used his debit card to pay the £2.99 P&P. His bank, Santander, placed a block on the payment automatically and contacted him to explain. He was advised to call Testocore to cancel the agreement. After struggling to find a contact number, he eventually managed to speak to someone who agreed to cancel the payment.

However, another payment went out the following month and this time the payment was processed, leaving him £94 out of pocket.

"There was deliberately no fine print. It was virtually impossible to get hold of them. I eventually did but they still took the money."

While Santander is now helping him get his money back, David says it is not fair that these companies are allowed to trick people.

Unfortunately, David's experience is far from unique. But progress is gradually being made.

Last year, the Financial Conduct Authority (FCA) confirmed that when a customer asks their bank to stop a recurring payment, then the agreement should be cancelled and if another payment should go through by mistake then the money should be refunded immediately.

This is important to remember, as many customers get told mistakenly by bank staff in branches that they are unable to cancel a CPA and that they must contact the seller instead – something which is very difficult to do and not the case anyway.

The Financial Ombudsman Service (FOS), which has seen a "notable" rise in the number of CPA complaints in recent years, told Moneywise while it would expect a consumer to have made a "reasonable" effort to contact the company, and recommends that they do so, it is "disappointed" to see that consumers are still being given the incorrect information at cashier desks.

The FOS says the majority of cases it deals with are solved quickly when it points out to the bank that it is obliged to cancel the CPA.

"If you spot a payment on your account that you don't recognise, let your bank or credit provider know as soon as possible. It pays to know your rights so remember if you aren't able to sort things out, the Ombudsman may be able to help," a spokesperson says.

The banks are starting to wise up to the issue.

For example, Royal Bank of Scotland has recently launched a pilot project to notify customers when a fee leaves their account to a business the bank has identified as taking part in free scams.

During one week in September, the bank contacted 40 customers who had funds withdrawn via a CPA, with 24 of those unaware that money was being taken.

However, like the FOS, it does recommend that its customers consult with the retailer or business they have entered into an agreement with and try to follow its cancellation policy.

It is a similar story across Lloyds Banking Group. A spokesperson told Moneywise that any customer who fears they have signed up for a problematic free trial should contact it immediately.

"We take the protection of customers' finances very seriously," the spokesperson says. "We can help cancel future recurring payments from customers' accounts and we may be able to claim back any payments taken after the date when it was cancelled."

The Consumer Contract Regulations that came into force in June this year also offer an extra level of protection. Consumers must now actively tick a box to say they agree to further payments – if they aren't made aware of further charges, they will not be liable for them.

The regulations also state consumers have the right to cancel an online order from the moment they place it until 14 days after the goods arrive. This may well cover the 'trial' part of the offer, so consumers still need to be aware of what exactly they're signing up for and make sure they cancel before the trial period ends.

Buyer beware

Free trials encapsulate the importance of 'buyer beware' perhaps more than any consumer issue.

If you are in any doubt about the legitimacy of a company that is offering something for nothing, don't sign up and/or give it your payment details in the first place – it's as simple as that.

As a spokesperson for Santander says: "We urge customers to consider such offers carefully and to research thoroughly any terms and conditions before signing up to an offer – if it looks too good to be true, it probably is.

"Once a customer has contacted us stating they have withdrawn consent for these subsequent payments to be debited, the bank will take steps to block any subsequent payments."

And if you are unfortunate enough to have been a victim, then don't bury your head in the sand. Speak to your bank or credit card provider, who will be able to help you put a stop to future payments and get your money back.

Tips for dealing with free trial scams

1. Make sure you fully read the terms and conditions of what you are signing up to. If you can't see them or there aren't any, don't give the company your bank details.

2. If you think you have been scammed, try to contact the business and explain you weren't told about the monthly repayments. This might prove fruitless but your bank will expect you to have tried.

3. Speak to your bank. If you tell it to put a stop on a continuous payment authority, it must do so. Don't be deterred by incorrect information given out by a cashier.

4. If your bank doesn't resolve the issue, then speak to the Financial Ombudsman Service. It will remind the bank of its responsibilities regarding CPAs and help put a stop to further payments.

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Just been scammed by

Just been scammed by 'capsoftlawless' and 'mvsolutdermac' products.

Thanks for your advice.

DO NOT DO THE SURVEY..for

DO NOT DO THE SURVEY..for tesco ..free watches sunglasses etc .they send watch and sunglasses ,then try and take 84 pound out of your account for each cheap item.they are worth about £5 they say its on trial..5.99 and 6.99 postage..as soon as you read the fine print you will see what i mean..i was conned ,and phoned the bank,told them not to pay any money to the company in cyprus..tried calling them,a few times, but nobody answered.they tried taking money again but my account was blocked.. So if you make the same mistake i made a phone call to bank straight away ,cancel credit or debit card,they will put you through to fraud team, and you can explain, then they will send a new card and new no..hopefully you can stop this straight away...Mo

I was invited to take a

I was invited to take a survey for Tesco. In return I would receive a pair of sunglasses. I filled out the survey and choose the sunglasses and gave my normal details and paid the p&p. When I received the goods the delivery note said TRIAL !
I then read the t&c . I was committed to paying £85 with an on going commitment to buy more each month. I contacted the bank 1st direct and cancelled my credit card. I realised on delivery so plenty of time to cancel within their 15day cancellation period which I will do tomorrow fingers crossed I can reach them by e mail and /or phone. I dread to think how much the phone bill will be as the address is Cyprus. Hopefully I have only lost the £6,99 p&p.

Hi Chris i did the same as

Hi Chris i did the same as you ,free watch and sunglasses..with tescos survey..tried calling them in cyprus a few times..,but no answer..cancelled my debit card straight away..what do we do next..send goods back at cost to us...i didnt even sign for mine as i was working. left outside..Cant afford to pay every month for cheap goods..let me know what you have done please...thanks

Hi Maureen and Chris,

Hi Maureen and Chris,

Moneywise is interested in investigating this potential scam. Please could you contact me on:

edmund.greaves@moneywise.co.uk or 0207 680 3665

Note my office hours are 08:15-16:45.

Many thanks,

Moneywise Edmund

Yes me also they are at it

Yes me also they are at it again its exactly the same company Maureen,This time its a survey for "Asda" which seems very legitimate and then when you complete the survey they offer the free gift to thank you at the end.
Just think of all the store groups that this company is pretending to run surveys!!
Just think of the money its scamming from law abiding citizens,it must be colossal amounts of money!!!!Why are the allowed to operate year after year??

Did you ever manage to cancel

Did you ever manage to cancel with the company? Did you have any further problems with money being taken? We have cancelled our card but can't reach the company. Just worried they will still get money somewhere. Wonder if this will affect credit rating.

I was scammed by "Fashion

I was scammed by "Fashion central-Watches" or "Bestjewlry" as they are otherwise known with a free trial watch offer they then proceeded to send me a watch every month and took £84 from bank account, the watch itself was worth less than £5 anyway. Bank has stopped any further payments and I managed to phone the company, based in Cyprus, I think, Who told me they don't do refunds.

I did the same thought it was

I did the same thought it was a Tesco survey,paid for postage and packing for watch and sunglasses..then when the cheap watch and sunglasses came it was a trial ,and after reading they were going to charge me about 84 pound a month. for each item....i cancelled my bank card.told bank , got in touch with the fraid line and told them i had been scammed.told them i.didnt want any more money paid to them.so hopefully this will be the end of this scam.. no more money has gone out of my account as i have a new card.. dont think i will be doing any online surveys again..

The bloody buggers got me too

The bloody buggers got me too!

I received an email to partake in a Tesco Survey, it seemed completely legitimate. I don't usually do them but thought, why not! I paid the postage, received some rather shocking sunglasses and thought oh well that's the end of that. A month later and I notice £84 has been taken out of my bank, I have been unable to contact 'Fashion Central'.......I can not believe I have been scammed! It's so frustrating!

I shall be calling the fraud team ASAP and I will take it as far as I can!

Hi Em,

Hi Em,

Moneywise is actively investigating this. Please contact Edmund Greaves on 0207 680 3665, or edmund.greaves@moneywise.co.uk so we can look into this further.

Best,

Moneywise