Negative Option Marketing

Oct 14, 2014 by

You May Be a Target But You Don't Have to be a Victim!Whenever the creators of something name it with an impenetrable phrase, it’s a decent bet they’re trying to hide something, and you’re about to get screwed. “Negative option marketing” is a prime example, and it’s another decent bet that you’ve been subjected to, if not victimized by, the technique.

What is Negative Option Marketing?

Many of us are suckers for free trials. The adage “there’s no such thing as a free lunch” is good to bear in mind the next time you’re tempted, especially if signing up means providing your credit or debit card number. Ask yourself: why is my credit card number needed if the trial is free?

Here’s why: Somewhere buried deeply in the fine print of the free trial offer is a disclosure that by engaging the free trial you’re also signing up for something that’s going to cost you money in the form of a future, and probably recurring, credit card charge.

The less slimy offers will inform you that “you can cancel at any time!” The marketer knows many who sign up will forget to cancel or fail to realize that they must cancel to avoid the future credit card charge. And often figuring out exactly how to cancel when that first charge appears on the consumer’s credit card statement maybe a month later is not nearly so easy as signing up for the free trial!

Widespread Success of Negative Option Marketing

According to the Better Business Bureau (which labels negative option marketing a “scam”), a 2009 survey of online consumers revealed that “29 percent of American consumers have fallen victim to deceptive marketing when unscrupulous e-commerce merchants require them to cancel or opt-out of a recurring charge for future products or services” Twenty-nine percent—that’s huge! No wonder the practice is so popular with marketers—it works!

The BBB says that “[w]hile many merchants use this billing process appropriately, others pre-check consent boxes, bury the details of the offers in the terms and conditions and make cancellations or returns difficult, catching consumers in a cycle of recurring charges for products and services they do not want.”

How to Avoid Being a Negative Option Marketing Victim

The BBB and Federal Trade Commission make these suggestions to dodge the negative option marketing scam:

  • Take time to read and understand all terms and conditions, so a free trial doesn’t turn into a costly purchase you didn’t intend to make.
  • Pay particular attention to any pre-checked boxes before you submit your payment card information for an order. Failing to un-check the boxes may bind you to terms and conditions you’re not interested in.
  • Review card statements when you get them for any unauthorized charges, and notify the card issuer promptly of any unusual activity or unauthorized charges.
  • Try to resolve the situation with the merchant. If you’re unsuccessful, contact the card issuer immediately to dispute the charge.

The BBB won’t like me for this, but if I were victimized I wouldn’t waste my time “trying to resolve the situation with the merchant.”  Instead I’d immediately dispute the charge. Your credit card statement will explain how to dispute charges made to your account. You won’t have to pay the charge while your credit card issuer is investigating the dispute, and the negative option marketing company cannot report you as delinquent to any credit reporting bureau or threaten to do so or sue you for collection. One downside though: If the charge is deemed to be legitimate, you’ll owe interest on the charge for the time it’s been outstanding past your account’s due date.

Check Your Credit Card Statement!

A main takeaway here is always check your credit card statement! And scammers particularly love to prey on senior citizens, so sneak a peek at your parents’ or grandparents’ statement too when you can!

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