Read the fine print before you sign up

It’s unethical and illegal for retailers to deceive customers into contracts

THE Consumer Protection Act did away with a particularly odious industry practice: that of the automatic contract renewal.

Since 2011, it has been illegal for companies to automatically roll-over contracts – they must contact consumers in writing before the expiration of their existing fixed-term contract and inform them of their renewal options. If the consumer fails to respond to that notice, the contract may roll-over on a month-to-month basis – but only on that basis.

Those terms apply to all fixed-term contracts, including for cellular network providers, gym contracts and magazine subscriptions.

But what about the automatic contract, that’s masked behind terms and conditions – which not enough of us ever read?

Some online marketers use free trials to entice customers. They suggest a product can be ordered for free, or that consumers can subscribe to a service for free. But some of these free trials involve problematic practices that mislead consumers into subscriptions for products or services.

The phrase: “There’s no such thing as a free lunch” springs to mind when I hear “free”: someone is always paying for it and when it comes to “free” trials, that someone is the customer.

In terms of “free trials”, these marketing tools are often used to deceive customers and enrol them inadvertently (to the customer) into paying subscriptions.

Some of these free trials involve deception, trapping customers into buying products and services.

Stephen D (surname withheld) is one of hundreds hooked by an online trader called Testo-Xtreme. He wrote to me about a “scam organisation” that he had stumbled upon and later learnt that there were multiple complaints about their questionable practices.

Testo-Xtreme sells supplements that purport to boost testosterone, enhance libido and increase sex drive. Stephen had found the company online and was eager to try their free trial offer of a two-week supply of the supplements, which apparently include vitamin B6, zinc, tribulus, magnesium and horny goat weed.

Stephen had no intention to sign up for a monthly supply of Testo, which is why, when he checked his bank statement in December, he was shocked to see he was being billed for the product.

Two amounts totalling R1 337.20, had been deducted from his account – without his express permission.

That’s a lot of money for something that may – or may not – work and that you can find cheaper in physical retailers. When he contacted them, he was told by “Dominic from Testo & No Xtreme Customer Support”: “Please understand that whenever you enter into a transaction (either online or via the telephone) with a supplier such as Testo-Xtreme, you accept the terms and conditions of that supplier, even if you did not read them. By law, it is up to you to make sure that you read and understand the conditions.

“The terms and conditions of TestoXtreme stated that you will be entering into a 14 (day) trial membership and that this membership automatically becomes a 30-day premium membership unless you cancel within 14 days. By giving your card details, you accepted

both the trial membership and the fact that you could only cancel during those 14 days.”

Furious, Stephen responded: “Hi Dominic, Jacob Zuma is no longer the president of this country. The looting and taking money from citizens’ bank accounts without their consent is a crime now, I have signed no contract with your company. You can highlight in any colour you like just because you did not say anything does not mean you agree to any cause.

“I want my money you have stolen from my account back. There are laws in this country and stealing money from people’s accounts is a crime. There are people in government who can deal with fraud and theft.”

To which Testo-Xtreme responded: “Due to the terms and conditions that you had to agree to before placing any orders, our company does not go back on the charges because we did send out a full 30-day supply. It states on the terms and conditions that if you do not contact us within your trial period, then you will be billed at the full cost, and

placed onto an auto-ship cycle.”

Stephen contacted them for the trial product – and that alone. He had no interest in their goods beyond that – and especially not to be signed up for “auto refill” – but now Testo had his bank account details and he wanted his money back.

While they don’t seem to be a complete sham – they do allow for cancellations – they are not above-board either.

Under the CPA, consumers have a right to choose, the right to fair and responsible marketing, fair and honest dealing, reasonable terms and conditions and supplier accountability.

Trapping consumers into subscriptions is prohibited conduct and hiding behind terms and conditions would be a violation.

Online transactions are furthermore governed by the Electronic Communications and Transaction Act, which requires, among others, that certain information is listed on the site where the goods are sold; an opportunity for customers to review, correct and withdraw from the transaction; and that

minimum information be disclosed (especially material information such as you’ve just signed up for a monthly supply of who knows what).

I tried contacting them numerous times. Once, I was put through to a call centre, whose agents put on phoney American accents, and couldn’t help.

Another number just rang. And “Dominic” eventually responded via mail, telling me to call the number on their website. No further response.

The list of issues with this particular retailer is extensive – and that’s not even venturing into the efficacy of the supposed product and the unproven worth of “horny goat weed” and other likely undeclared ingredients – so I’ll leave you with an extract from the litany of online complaints: “They send you a trial, then without confirmation they start to debit from your account using your card details, I had to cancel my card due to these (expletive), these guys are … only out to steal your money, the product is (expletive) anyway.”

To borrow loosely from Nike: Just don’t do it.