‘Free offers’ might not be as free as you think

Image courtesy of mrpuen at FreeDigitalPhotos.net
Image courtesy of mrpuen at FreeDigitalPhotos.net

BBB Investigation: Online supplement business demonstrates problems with ‘negative option’ advertising

Online shoppers sometimes discover to their dismay that they have unknowingly agreed to spend more than they intended because of a practice called “negative option” advertising.

A negative option commits consumers to automatic purchases often described as subscriptions or memberships unless they specifically opt out.

The BBB Code of Advertising recommends companies using negative option advertising clearly and conspicuously disclose their policies. Unfortunately, some online businesses may count on consumers’ confusion as a way to increase sales.

Better Business Bureau (BBB) serving Central, Coastal, Southwest Texas and the Permian Basin recently reviewed some consumer complaints alleging trouble with negative options. BBB found that some consumers alleged they were misled while trying to get free trials for an online health supplement. The website advertised claims such as “Order your risk-free trial bottle TODAY!” and “Where do we send your free bottle? Just Pay Shipping & Handling.”

BBB investigated the website consumers complained about, as well as others that appeared to be related, and found many different companies and products, including bodybuilding, male enhancement and diet supplements. The websites are registered through proxy services that keep the website owners’ information private. In two cases, customer service representatives BBB contacted by phone either gave addresses that turned out to be drop boxes, or refused to give their parent company’s physical address.

One supplement company BBB investigated had terms and conditions clarifying that consumers had to cancel within 10 days from the order date—not the date the product was received—to avoid a membership fee of $119.98 and enrollment in an auto-shipment program.

In a common negative option scenario, the consumer only sees a small link at the bottom of the webpage with a small box saying, “I agree to the terms and conditions.” If the consumer doesn’t read the terms and conditions, he or she may not realize that clicking that box obligates them to purchase a 30-day supply and enroll in an auto-shipment program. In some instances, the terms and conditions make it difficult for the consumer to cancel a free trial by setting up unrealistic deadlines.

According to the BBB Code of Advertising, companies using such offers should make it clear to consumers how to accept the trial offer while opting out of purchases and memberships.

When buying merchandise online, BBB offers the following advice:

  • Pay with a credit card. Under federal law, charges made on a credit card can be disputed up to 60 days after the purchase.
  • Keep documentation of your order. After completing the online order process, there should be a final confirmation page or an email confirmation. Save any receipts for future reference.
  • Know your rights. Federal law requires that orders made by mail, phone or online be shipped by the date promised or, if no delivery time was stated, within 30 days. If the goods aren’t shipped on time, the shopper can cancel and demand a refund. There is no general three-day cancellation right, but consumers do have the right to reject merchandise if it’s defective or was misrepresented. Otherwise, it’s the company’s policies that determine if the shopper can cancel the purchase and receive a refund or credit.
  • Do your research. Check the company’s BBB Business Review at bbb.org before making a purchase to see its complaint history, details about complaints and any advertising-related issues.
  • Read the fine print. The company may hide a commitment to purchase goods or services in the terms and conditions. These commitments may not be explicitly stated on the website.