No Such Thing as a Free Lunch: The Concealed Risks of “Risk-Free” Trials

It seems every product these days comes with an offer of a “risk-free” trial. These enticing offers, often for pricey products or subscription services, are sometimes called “free trials,” or “risk-free guarantees.” In our modern economy, our email inboxes and social media feeds runneth over with these ads. But the devil, in the form of recurring subscriptions and hidden fees, is in the details.

“Risk-free” trials are a popular marketing tool that companies use to attract new customers. These trials are often advertised as a no-strings-attached opportunity to experience a new service or product, inducing consumers to sign up without much hesitation. Quickly clicking through sign-up pages full of terms and conditions, many customers enter their personal and financial information, including a credit card for payment; Countless “free trial” sign-up pages are riddled with assurances that the customer will not be charged… yet.

Many risk-free trials are structured in a way that, unless the customer opts to cancel their service before the trial period ends, they are automatically enrolled in a paid subscription. And some companies redirect consumers through a series of alternative offers, each more compelling than the last, when they do attempt to cancel. Often, the process for canceling the subscription is deliberately made cumbersome or unclear, buried someplace within arcane terms and conditions. This practice, known as negative option billing, catches consumers off guard, leading to unexpected charges on their credit cards. Financial services companies offering monitoring of subscriptions on credit card bills have proliferated, helping consumers catch on, but only after they’ve been charged.

These practices, called “dark patterns,” are increasingly used by companies to trap consumers in expensive subscriptions. The FTC first issued a statement in late 2021 that it was going to crackdown on deceptive subscription scams, following up with a report in 2022. More recently, FTC has taken enforcement action.

While “free” trials and subscription offers might seem like an easy way to explore new products or services, the fine print often tells a different story. The rise of dark patterns has made it increasingly difficult for consumers to navigate these offers without falling into costly traps. Although FTC has begun taking steps to address deceptive practices, putting the onus on companies to prioritize transparency and fairness in their marketing tactics, it is critical for consumers to stay vigilant, read the terms, and ensure they understand the potential risks of “risk-free” trials.