Columbus, OH – Spring ushers in home improvement and renovation projects, new daily needs, and thus the engagement of new services. These new decisions come with contracts – contracts that may be used to lock consumers into an agreement they never fully understood.
Consumers are easily trapped by “negative option contracts.” And the FTC says they are on the rise. A “negative option” is an arrangement where goods or services are provided to consumers automatically unless the seller/provider is explicitly informed of cancellation. Think lawn treatments, pest control, seasonal inspection services, gym memberships, car wash memberships, vacation clubs, cell and internet service, make up subscriptions, and other subscription goods/services. Although negative options can be convenient if a consumer actually wants the goods or service provided, they can also be a nuisance when the buyer fails to cancel before the trial ends or cancels improperly.
As part of a Better Business Bureau study, the attorneys general of 22 states indicated that over a 10-year period misleading free trial offers cost consumers more than $1.3 billion – a number that’s on the rise.
A consumer might even call to cancel and receive confirmation from the service person that the subscription is canceled, but the charge will continue to recur. Often this is because the consumer didn’t cancel the contract in the specific manner outlined when they signed the agreement. Many require cancellation in writing – not just with a call or instant message to customer service.
BBB offers tips for consumers when dealing with these types of contracts, especially before signing.
- Read before signing. And never sign a blank contract or any contract before reading any fine print or additional clauses.
- Know exactly the required cancellation method to accurately cancel any contract.
- Remember, your signature binds you to a contract. A signature is an agreement to the service or subscription being offered.
- Declining offers in a contract can be an option. If there is something in the contract agreement that doesn’t apply, consumers should cross it out before signing. If a seller will not accept an edited form then the consumer can exit the agreement before signing.
- Get a copy or take a picture of the contract once signed and co-signed. Ensure the date is clearly documented.
- Use a trusted credit card with a strong charge dispute policy.
Other Helpful Hints
- Be sure any writing in the contract is understood. Unless mentioning a specific product, service, or action, the word “guaranteed” may be worthless.
- For home improvement or remodeling, don’t sign for completion slips before the work is inspected and finished satisfactorily. Don’t pay the full amount until a service is satisfactorily completed.
- Read every line in a contract. Be absolutely sure there is no ‘hidden’ agreement to pay for unwanted items/services, especially when agreeing to items like a free trial offer.
- Only deal with a reputable service provider or business. Complete research into the provider’s reviews or even ask for references, especially when dealing with contract work.
- Check to see if the business is accredited and rated with BBB.
For More Information
Read BBB’s special report on free trial offer scams.
Learn more about hiring a contractor to work in or around your home.
Stay up to date on the latest scams by subscribing to BBB’s weekly Scam Alert email.
To report a scam, go to BBB Scam Tracker.
