With New Year resolutions falling by the wayside it’s more tempting than ever to sign up for a free trial of a miracle weight loss tablet or muscle building supplement. We’ve all seen them advertised through social media and while many of these ‘neutraceutical’ companies are legitimate, there are many who are taking advantage of consumers.
Clever advertising and pop-ups on social media websites lure customers into what they believe to be a free trial of a cream or tablet. They are asked to enter their card details to pay a small fee to cover postage and packaging. In reality, by providing their card details and entering the free trial they are agreeing to a recurring subscription, if they do not cancel within a trial period.
At its worst point, RBS and NatWest were seeing over 390 calls a day to complain of charges of around £80 a month being applied to customers’ accounts that they don’t recognise. Customers receive the goods but don’t know about the recurring costs associated or that they have to stop the trial.
Subscription details and charges should all be laid out in the terms and conditions of the agreement but the bank has found instances where the T&Cs only appear after the customer has agreed to them, where they’re hidden at the bottom of the page or where they’re greyed out making them near impossible to find.
The bank estimates that at its peak this was costing customers over £30k per day and over £2.9m in fees since June last year.
RBS and NatWest have raised the issue with Visa, MasterCard and Cards UK and have provided them with the details of merchants causing regular complaints. They estimate over 37,000 customers have fallen foul of these scams. Since August, this information has led to over 1,000 of these companies having their acquirer relationship terminated leaving them unable to process payments.
Terry Lawson, Head of Fraud at RBS said, “Too many of our customers have fallen victim to these scams. We want to help raise awareness so that both our customers, and the wider public, are aware of these sharp practises and look out for unclear or confusing T&Cs. If any of our customers think they have accidentally entered into an agreement we’d urge them to contact us so we can help cancel any future payments.”