Picture this scenario: You’re scrolling through Instagram when you see an ad for a moisturizer. It looks pretty decent, and it’s free! You hand over your credit card info to pay for shipping. The cream, when it arrives, sucks, but still seems all in all like a pretty good deal.
Two months later, though, you learn that not only have you been charged for the allegedly free product, but you’ve also unwittingly signed up for a recurring monthly subscription.
This type of scheme, where people get tricked into fake free trials, is happening more and more lately, according to a new report released by the Better Business Bureau. Fraudsters are relying on the ease of social media and the anonymity of the web to lure naive shoppers, earning billions of dollars while hooking them into signing up for shady products.
Between 2015 and 2017, the report says, the number of complaints filed to the Federal Trade Commission about fraudulent free trials has doubled, although the BBB didn’t offer specific numbers. People eager to try something new for free are being tricked into sharing their credit card information. They are then left with charges that they must cover, and subscriptions that they aren’t easy to cancel.
Misleading free trial offers have cost shoppers more than $1.3 billion over the last decade, and the average amount of money lost is $186 per scam. This hype of hoax, according to the BBB, has “infested the internet and social media.”
How people are getting tricked with free trials
Gimmicks like automatically enrolling customers in costly subscriptions they never wanted are typically associated with television infomercials. But the ability for anyone to create a sophisticated-looking website and buy a social media following now means that these scams lurk in all corners of the internet.
The BBB report finds that 72 percent of complaints about free-trial fraud are from women, and that while financial scam networks typically target the elderly, people in their 30s have made the most complaints of this kind. The most common products misleading shoppers are typically things like wrinkle creams and diet pills, but the BBB says that teeth whiteners, teas, and cannabis products, all of which are trendy Instagram fodder, are becoming popular bait.
The BBB says it receives complaints from people being duped into free trials every day. Shoppers are typically lured in on social media, or by web browser pop-ups. They’ll sign up for, say, a free 14-day period, but the fine print is usually buried, and people are not aware the 14 days likely includes the time it takes to ship the product; in these cases, they are often charged just as the product arrives. Victims are also often signed up for mandatory shipments via monthly subscriptions they didn’t even realize they’d agreed to.
While most shoppers know to avoid products from pop-ups, companies may be tricking them with fake celebrity endorsements, according to the BBB report. Celebrities like Nicole Kidman, Gwen Stefani, and Leonardo DiCaprio have all been tied to dubious products without actually being involved, as have figures including Meghan Markle, Oprah, Dr. Oz, Chelsea Clinton, Sarah Palin, Ivanka and Melania Trump, and the entire cast of Shark Tank.
Rose, a nurse from St. Louis, told the BBB she saw an ad on social media for a skin care product by Purely Organic Cosmetics that claimed it was endorsed by Shark Tank, so she signed up. Stacy, another victim from Chicago, says she ordered a free trial of a skin cream after the company claimed it was endorsed by Kate Middleton. Renee, a fifth-grade teacher in Texas, bought a skin care product because its ad implied Joanna Gaines of Fixer Upper was promoting it.
All of these victims thought they were paying a fee of $1 to $6 for shipping, only to find that their credit card had been charged hundreds of dollars weeks later, and that they were bound to subscription payments after the 14-day grace period.
As if the unwanted charges aren’t upsetting enough, the BBB also reports that the products are often as problematic as the trials themselves. One company, Central Coast Nutraceuticals, duped victims out of $80 million by signing them up for subscriptions for weight loss and colon cleanse pills with acai — but some of its pills didn’t even contain acai. An FTC case about spam emails selling “herbal and safe” male enhancement pills found that the company was actually selling pills with sildenafil, the active ingredient in Viagra.
According to Scientific American, countless dietary supplements on the market actually have ingredients that are found in prescription drugs. These type of discoveries don’t just make the products sketchy and unregulated; they are also potentially dangerous, as prescription drugs can cause negative reactions and might conflict with other medications.
Once a victim, it’s hard to get out of the scam
Although it’s illegal to trap customers into monthly billing cycles without providing a simple way for cancelation, as per the Restore Online Shoppers Confidence Act of 2010, victims have told the BBB they’ve had trouble speaking with real people on the phone to cancel. Customer service operators they did reach, they reported, were often rude and aggressive.
“I ordered a product called FITFIRM face cream from a Facebook ad,” one victim lamented on the BBB site in March 2018. “The ad said that it was $6.95 for a trial of the skin cream. There was not anything about joining a membership or authorizing my credit card for an automatic payment. … I told Anthony who answered the phone that I did not want a membership. … He got very aggressive with me and said I signed and agreed to their policies which I absolutely did not.”
“I was unable to reach this company by phone to tell them I do not want their product anymore,” another victim wrote. “I attempted to call the number provided on the invoice only to discover that it kept disconnecting, or it was constantly busy!”
The BBB says that many victims have been able to stop future shipments, since these companies don’t want to get flagged by credit card companies if customers file complaints with their banks. But most victims are not able to get refunds on past charges.
With the help of consumer complaints, the BBB, and the FTC, some scammers have been caught in the act. In 2017, Santa Monica fitness company Beachbody, which sold weight loss products and supplements, was fined $3.6 million for deceiving shoppers into automatic renewals. In 2012, sexual enhancement nutritional products company Berkeley Premium Nutraceuticals was found guilty of fraud and had to pay up $24 million. In 2016, Utah resident Jeremy Johnson, who operated a program enrollment company called iWorks, was sentenced to 11 years in prison for bank and wire fraud, and money laundering.
But these companies aren’t always so easy to track down. Many operate under shell corporations and rely on offshore banking accounts, while others sell the same beauty and diet products under tons of different names. The BBB has identified two fulfillment centers — one in Tampa, Florida, and another in Ontario, Canada — that ship out hundreds of different products associated with misleading free trials. But these are not the actual locations of the companies themselves, making it impossible for the BBB or the FTC to identify the people at the center of these hoaxes.
What shoppers can do to avoid scams
Not all free trials are scams: Music streaming services like Pandora and Spotify offer users free trials all the time, and allow them to easily opt out of subscribing. FreePrints offers customers free photos so long as they pay the shipping costs. Leggings brand Girlfriend Collective offers a first pair of leggings for free, and similarly asks customers only to cover shipping.
These type of offers can make the world of free trials confusing, especially to shoppers who aren’t as web savvy. The BBB believes tech companies like Facebook and Google need to be held accountable for enabling this type of fraud. But it also acknowledges that victims must now be more diligent than ever. This includes taking screenshots of free trial offers, carefully analyzing credit card statements, and being judicious about anything that seems too good to be true.
“We warn consumers to use extreme caution before agreeing to the offer and entering their credit card information,” the BBB suggests. “The chance of encountering this type of deception is high. The problem is growing.”