MARKETPLACE: Too good to be true
Marketplace has received hundreds of emails from viewers who’ve been stung by surprise credit card charges after signing up for what they thought were “risk-free” product trials endorsed by respected celebrities like Ellen Degeneres, Celine Dion and the stars of CBC’s Dragons’ Den. While thinking they signed up for a free trial offer, thousands of Canadians found themselves trapped in a subscription scheme. These schemes use fine print and deceptive marketing techniques, including fake articles, bogus endorsements and phoney surveys from legitimate companies, to trick people into paying for products and services they don’t want.
The scam starts with a merchant who decides to sell a product online, whether it is face cream, garcinia cambogia, weight loss pills or teeth-whitening products. As the U.S.-based Federal Trade Commission has pointed out, the products used in subscription traps are largely irrelevant; the primary purpose, after all, is to acquire credit card numbers, not to improve people’s complexions.
The merchant then creates a website offering free trials of the product. Underneath the promise of a free trial, the merchant will place recurring fees in the fine print of buried Terms and Conditions, hidden at the bottom of the page in a hyperlink. After what is usually a 14-day trial period, customers automatically become enrolled in monthly subscriptions if they don’t cancel, and their credit card can get billed hundreds of dollars every few months.
And it gets even more confusing for consumers trying to get their money back. The merchants are constantly changing their product names to avoid bad online reviews, according to Better Business Bureau. The RCMP’s Anti-Fraud unit told Marketplace they have linked 371 different product names to this subscription trap.
As the merchants need advertising to direct people to their offers, they then harness the power of what’s called affiliate marketing.
Affiliate marketers promote products on the Internet using blogs, websites, articles, and banners. While affiliate marketing is used legitimately, and ethically, for all kinds of Internet advertising for big corporations, some affiliate marketing practices often rely on deceptive and misleading practices.
These affiliate marketers often create fake news articles that use well-known celebrity names or phoney pop-up surveys that appear to come from trusted sources such as Costco, Air Canada and Rogers.
In these kinds of subscription traps, both the merchant and the affiliate marketer could be held responsible; the merchant for hiding the charges and the affiliate marketer for creating misleading advertising.
Marketplace tracks down a Canadian merchant and reveals how you can avoid getting tricked tonight at 8 p.m. (8:30 in NL) on CBC.
Article source: http://www.toronto24hours.ca/2017/10/13/marketplace-too-good-to-be-true