Hard to find, hard to cancel
I had a particularly difficult time attempting to cancel a 30-day trial of SociallyKnow, an $11.95-a-month service that monitors your child’s Facebook account and reports signs of bullying or risky communication. I could find no cancellation information on the website. The toll-free phone number that I dialed took me to an answering system that would accept only voicemail messages, with the promise that someone would get back to me. When I emailed the company’s customer support department from a link on the homepage, I received bounce-back messages saying “address unknown.” I never received a callback despite leaving nearly a half-dozen requests for the company to return my call.
After I contacted the company’s public relations firm seeking comment for this report, I got a call from SociallyKnow’s cofounder, Paul Crandell, who apologized. “There are obviously some bugs to work out,” Crandell told me. He blamed technical errors for the problems I had encountered with the service’s voicemail and email. SociallyKnow, Crandell admitted, should make its cancellation instructions clearer. In his defense, he said that the site offers some disclosure about how to cancel the service, pointing to a sentence about halfway into the 3020-word terms of service that states: “The Customer may terminate its SociallyKnow account at any time and for any reason, after the first three months of service, by sending an email to support@SociallyKnow.com.”
Susan Grant, director of consumer protection at the Consumer Federation of America, says that free-trial offers online account for a large number of consumer complaints to state and private consumer-advocacy agencies. “We find people complain less about the services themselves, and more about surprise charges and tricky terms of service,” Grant notes. She says that typical complaints include mystery billing for services that consumers don’t remember agreeing to pay for.
“Free trials are ubiquitous, and there are just no standards, which is problematic for consumers. It’s very much a Wild West out there,” Grant says. No two free trials are the same, she says, and companies may employ several tricks. “It almost seems like they are making it hard to quit on purpose.”
Pitfalls of free trials
Over the course of my testing, I discovered quite a few of these tricks. In the chart here (click to view it full size), you can see the 17 free trials, of the 40 I tested, that put me through a moderate amount of hassle when I tried to quit.
If you’re considering signing up for a free trial, watch for the following traps.
Free trials can cost you more in the long run: With my subscription to ESPN Insider, the terms and conditions mentioned that “the renewal rate may be higher than the introductory rate for first-time subscribers.” When I checked the prices, I saw that ESPN charges $39.95 a year for ESPN Insider if you sign up without the free trial. My free-trial arrangement, in contrast, worked out to a rate of $44.95 per year.
Some free trials don’t prevent you from incurring costs: My Audible 30-day free trial included two free audiobooks. But if I had listened to a third book during the trial period, I would have been charged before the end of my 30-day free trial.
Knowing when the trial starts and stops can be tricky: In some free trials, the day you start your trial is day one. For instance, if you start a seven-day free trial on a Sunday night at 10 p.m., the trial will end the following Saturday—not the following Sunday at 10 p.m. Although you might naively assume that you have seven full days from the moment you start, in fact you have only seven calendar days. This issue is particularly tricky with free trials that last 72 hours, such as the ones I tested at Match.com and at the Foreclosure Radar website.
Waiting until the last day can cost you: Canceling on the last day of a free trial may result in charges. That’s exactly what happened to me (by accident, according to representatives) with my free trial subscriptions to the Cook's Illustrated culinary website and to TrustFax.
Free trials may have costly conditions: With DVD-by-mail rental services such as Blockbuster and Netflix, you must send DVDs back within a certain window, or incur a charge. Blockbuster has a grace period of ten days past the end of membership; after that it charges you $20 per DVD plus shipping and handling. Netflix has a seven-day grace period, and then charges $14 for each DVD and $20 for Blu-ray discs.
The truth might be buried in the fine print: Companies providing free trials typically emphasize the benefits of the trial while downplaying the actual terms of the offer. The SociallyKnow free trial, for example, converts into paid monthly service with a three-month minimum membership requirement. So if you inadvertently allow your free trial to become a paid subscription, you’re on the hook for three months of service.
Some services use scare tactics: Free trials of identity-theft protection services sometimes play fast and loose with the facts regarding the real threat of ID theft, the Consumer Federation of America found. “Some use data exaggerating the prevalence and risk of ID theft,” the CFA’s Susan Grant says.
When I called to cancel an ID-theft protection service from LifeLock, Rebecca, a customer service representative for the company, tried to retain me as a customer by citing U.S. statistics on identity theft. Eleven million people last year had their identity stolen, she told me. “That number has already been superseded this year,” she said. When I asked her where the statistics she had cited came from, the LifeLock rep claimed that the source was the U.S. Federal Trade Commission.
However, I checked with the FTC, and a spokesperson said that those numbers were incorrect and that the agency didn’t keep official numbers on ID theft. According to the U.S. Bureau of Statistics, 8.6 million households in 2010 (the most recent figures available) reported an attempted or actual incident of ID theft where a person’s identity was used to open a bank or credit account. No preliminary figures for 2012 were available.
When I asked Tami Nealy, a LifeLock spokesperson, about the issue, she told me that the 11 million figure for ID thefts in 2011 should have been credited to a report by Javelin Strategy and Research, funded in part by Intersections, an ID-theft prevention firm. Nealy said that ID theft in 2012, as compared with 2011, is on the rise according to a number of different studies. But she also acknowledged that the representative had incorrectly described the data to me as having come from the FTC. “We apologize for any confusion her inadvertent cite error may have caused,” Nealy said.
Economics of free trials
The business model behind free trials is simple: Give people a taste of your service, keep your fingers crossed that they like it, and hope that they stay. Requiring a credit card at sign-up makes it easier for companies to convert tire kickers into paying customers. Companies that I spoke with claimed that the requirement was a convenience. GoToMyPC representatives, for instance, say that the requirement allows the company to continue service without interruption when the free trial ends. Internet Movie Database’s reps justify it differently, saying that “a credit card allows us to verify a user’s identity and avoid multiple sign-ups for free trial memberships.”
Who are these companies kidding? The credit card requirement serves only the companies offering the free trial. Having to put down a credit card to participate in a free trial is like lending your friend money for a trip to Las Vegas: Sure, he’ll pay you back, but when? It’s a risk.
When a company requires a credit card as part of a free trial, 40 to 45 percent of those accounts become paying customers, says John Greathouse, a dot-com entrepreneur who was also one of the original online marketers for GoToMyPC. “Non–credit card trials generally convert in the low single-digit range—typically 2 to 4 percent,” Greathouse says.
Another painfully clear truth: The easier companies make it for people to sign up, the more customers they get. Such companies may also suppose that the harder they make it for trial users to unsubscribe, the more customers they’ll keep.
That’s flawed logic, in my opinion. The more hassles a company gives me, the less likely I am to do business with them. And the companies that make it easiest to unsubscribe are ones that I would consider patronizing again.
Next page: Free trials we liked