BEWARE HIDDEN COSTS OF FREE ONLINE OFFERS

Q

I signed up for a free trial of a diet product and foolishly gave my credit card details. Now I find that my account is being billed for €50 every month! Apparently, I didn’t read the small print, which said this would happen if I didn’t cancel the order. Can they get away with this?

A

‘Free trial’ offers can be a legitimate marketing tool. Companies may offer a free or very cheap deal for a certain period after which you start getting billed for much more. It’s a bit dubious as people often forget to cancel before the price goes up. But some companies with good consumer practices don’t lock you in indefinitely and will allow you to cancel when you want to.

However, others do not under the terms of the contract. You may inadvertently ‘sign’ simply by clicking yes and giving your credit card details, a major loophole in consumer protection. Take Canada’s Jesse Willms, who started ‘free trial’ offers for diet and beauty products while still in high school to buyers all over the world, including Ireland.

Within a few years, while still in his early twenties he had amassed a fortune known to be at least €360m.

He used photos of well-known celebs (without their knowledge) to promote incredible claims of rejuvenation and dramatic weight loss. They loudly proclaimed the ‘free’ element of the trial. The ‘catch’ about getting hammered if you don’t cancel in time was in the small print – on another web page.

It appeared that all you had to pay was a few euros for post and packaging – which meant giving your credit card details. As like you, many people didn’t read the small print, few realised that they would be billed for a much larger sum later – every month. He even had fake websites and news items lauding himself and his products to fool anyone who did online research.

It was the perfect scheme (apart from being sued by Oprah Winfrey!). But he was too successful. He couldn’t cope with the demand. Products went undelivered and phones unanswered. It was this, rather than the principal of free trial offers, that got him in trouble with US watchdog, the Federal Trade Commission.

They took his money and assets, including a fur coat, mansion and flashy cars. He agreed not to sell stuff online. But he didn’t go to jail.

There are many Jesse Willms out there, often less scrupulous than him. They don’t even have to break the rules to get your money. The EU did bring in a directive requiring that the small print stuff about cancelling in 14 days must be on the same internet page as the rest of the offer. But internet traders can still be based outside its jurisdiction. Or they can be hard to trace or unwilling to cough up.

Your best bet is complain to the company and, if you get no joy, contact your credit card provider. If there are enough complaints about a supplier, they will instigate a ‘charge back’ to retrieve some or all of your money. If this doesn’t work, cancel your credit card account.

For further advice, contact the European Consumer Centre on 01-879-7620, or eccireland.ie

Q

If I arrange nursing home care through a loan from the Fair Deal scheme am I in danger of losing my home? How much interest is charged?

A

The Nursing Home Loan is based on a portion of the value of the home (not exceeding 21.5%) and it falls due to be paid when the house is sold or the person in care passes away.

If a spouse is still living in the home, it can then be deferred again until they depart this world as well, or sell up.

The loan accrues interest at the Consumer Price Index rate which is currently zero, although it is expected to increase.

If the loan is overdue and neither paid nor deferred, then the Revenue step in and apply interest at a higher rate.