Local consumer loses $600 to cosmetic company’s “free trial” offer on Costco website
With more than 20 complaints in the last month about deceiving “free-trial” offers for cosmetic products advertised online, BBB is warning consumers about too-good-to-be-true online deals. For one Calgary woman who is out $600 after signing up for what she thought was a “free-trial” for face cream, she says paying attention to the advertisement details is key.
In February, Suzanne Smith (name has been changed on request to remain anonymous) found herself on Costco’s website when she saw an advertisement for what seemed like a free-trial for skin care products. All she had to do was pay for the shipping and handling. The catch? Once she handed over her credit card information, she unknowingly signed-up for a subscription service that automatically continued to send her new products at full price, and add new charges to her credit card each month.
“I looked at the ad, and thought that because it’s on the Costco website it would be safe and legitimate. It wasn’t until after everything happened that I discovered this company isn’t affiliated with Costco at all.”
Smith used her Costco credit card to pay for the shipping and handling, and when she received the package, she said the products didn’t look like typical samples. They were much larger in size and the packaging looked suspicious.
“The box in the mail had an Ontario address, but when I checked my credit card statement, it showed three different company names with multiple small charges and a phone number that had “GBR” next to it, which my credit card provider said meant “Great Britain.” I called the number and asked if the company was based in Canada. The person said the company call centre was located in Florida, which made everything more suspicious.”
Smith unexpectedly received more packages in the mail and noticed more charges on her credit card totalling approximately $600.
When she called her credit card provider to dispute the charges for the extra products that she did not order, she was told there was nothing that could be done because she must have agreed to the terms and conditions of the offer, even if it was a subscription service, in order to receive the products.
The credit card company also told Smith they were well aware of this issue already, specifically with Costco’s website being used to advertise “free-trial” offers.
“I don’t remember agreeing to terms and conditions, there was nothing that jumped out and said the company is going to send you something every 30 days, and there was no mention of price because it was a free sample,” says Smith.
“When I called the company to ask for a refund, they said no because the first charge was more than 30 days old. Then I was told that they could offer a 30 per cent refund which I refused. Then they offered me a 50 per cent refund and said they would have a supervisor call me back. I still haven’t heard back from anyone and I don’t think I ever will.”
Smith has not agreed to the 50 per cent discount as she feels that accepting it would mean she’s agreed to a settlement and the charges on her credit card wouldn’t be dealt with.
Smith says her credit card company did advise her to cancel whatever it was that she signed up for with the cosmetic company, and if she still continued to receive charges for products after cancelling, then the credit card company could dispute those charges.
In the meantime, Smith is stuck with the $600 charge.
Smith has since contacted Costco customer service who says they aware of the issue and is investigating, and she has also informed police.
“They rely on you not to check your credit card statements,” says Smith. “That’s how they hope to get you. I used to receive my statements online, but I wouldn’t always check them regularly. I’ve now switched to paper copies that will come via mail, and I will be checking everything from now on.”
BBB says beware of online ads for “free-trial” offers with these tips:
Find the terms and conditions for the offer. That includes offers online, on TV, in the newspaper, or on the radio. If you can’t find them or can’t understand exactly what you’re agreeing to, don’t sign up.
Look for who’s behind the offer. Just because you’re buying something online from one company doesn’t mean the offer or ad isn’t from someone else.
Watch out for pre-checked boxes. If you sign up for a free trial online, look for already-checked boxes. That checkmark may give the company the green light to continue the offer past the free trial or sign you up for more products – only this time you have to pay.
Mark your calendar. Your free trial probably has a time limit. Once it passes without you telling the company to cancel your “order,” you may be on the hook for more products.
Look for info on how you can cancel future shipments or services. If you don’t want them, do you have to pay? Do you have a limited time to respond?
Read your credit and debit card statements. This will help you to know right away if you are being charged for something you didn’t order. If you see charges you didn’t agree to, contact the company directly to sort out the situation. If that doesn’t work, call your credit card company to dispute the charge. Ask the credit card company to reverse the charge because you didn’t actively order the additional merchandise.
For more information, visit www.costco.ca.