If you’ve ever signed up for a free trial of something (like TV and music subscription services or even a magazine), you know there is one pretty big downside. While the trial will only cost you a low trial rate or nothing at all, you’ll automatically be charged for the next month if you decide you don’t want the service and forget to cancel.
That is, unless you pay with a Mastercard, as the company has just announced new rules when it comes to these free trial periods. In short, merchants will now be required to get your approval at the end of the trial before they start billing.
Mastercard says this requirement will come in the form of either an email or text, which shows the transaction amount, payment date, merchant name and instructions on how to cancel the trial.
Even if you decide to continue the trial, every time the merchant seeks payment for the next billing cycle, they’ll be required to send a receipt and the instructions on how to cancel. Plus, all charges that appear on your Mastercard statement will now include the merchant’s website and phone number.
“For some consumers, a free-trial is a great way to test out a new product and get comfortable with it before making a purchasing decision. And with so many merchants offering free trials for physical products, they’re becoming the new norm,” Mastercard wrote in a statement.
The company also added, “However, sometimes a free trial can unwittingly turn into a recurring product subscription that is difficult to cancel. These situations can be frustrating and costly for both consumers and their banks.”
If you find yourself being charged after a free trial period and do not have a Mastercard, the Federal Trade Commission says to call your credit card company to dispute the charge. They say you should ask the credit card company to reverse the charge because you didn’t actively order the additional merchandise.
Have you ever forgotten to cancel a free trial subscription and been charged for it?