“Free Trial” Scam Probe: Trial Ends in Yearly Fee Charge

Beware of Deceptive Free Trials Leading to Unexpected Charges

Ms. Wu from Zhengzhou, Henan, was exasperated when she was charged for a year’s membership after downloading a photo editing app that offered a “7-day free trial, with a 98 RMB automatic renewal fee which could be cancelled at any time.” She assumed that as long as she canceled within the 7-day period, she wouldn’t be charged. Instead, she found herself billed for the entire year, asserting, “What kind of free trial leads directly to a year’s subscription?”

Feeling duped, Ms. Wu sought a refund from customer service, only to be told that after having used the app, a refund was not possible. Frustrated, she vowed never to trust “free trials” again, labeling them a mere play on words.

It appears that these “7-day free trials” or “1 RMB for 7 days” deals have become crucial tactics for apps to lure in users. However, an investigation by Legal Daily reporters discovered that many consumers, like Ms. Wu, have fallen into traps set by these so-called free or discounted trials. Some users find themselves enrolled in monthly or annual plans simply by clicking on the trial offer; others are lured by low introductory prices, only to later discover the renewal fees are much higher; and some face ambiguities about the free trial period, with a second click after some time mistakenly authorizing an annual fee payment.

Experts interviewed by reporters agree that to address the disorder in app “free trials” and “discounted usage,” a collaborative regulatory effort is needed. Detailed, practical implementation rules should be established. It is necessary to clarify the obligations that businesses must fulfill when providing such services, and alert consumers in an obvious and comprehensible manner. Additionally, regular oversight should be reinforced, and effective online dispute resolution channels should be put in place to safeguard consumer rights.

Free Trials Result in Unauthorized Charges, Leading to Spike in Complaints

Recently, Ms. He from Chongqing was reviewing her account statement when she noticed an unexpected charge of 108 RMB. She traced the charge back to a subscription fee for a beauty camera app that she had trialed.

“I didn’t realize I had been billed 108 RMB. I remembered downloading and using the app during a ‘7-day free trial’ campaign and without any warning, I was charged the subscription fee at the end of the trial period,” Ms. He claimed, deeming such practices deceptive.

Ms. Zheng from Hengyang, Hunan, reported a similar issue. She “trialed” a video editing app for free, only to be charged 168 RMB for an annual membership. She recalls canceling the trial and subscription on the same day, yet was still billed for the whole year.

Like many others, Ms. Zheng sought a refund through customer service but was initially denied because she had used the app. It was only after filing a complaint with the 12345 hotline that the service team agreed to issue a refund. “The promotion said it was a free trial, but as soon as you use it, you are charged. Isn’t that deceitful?” said Ms. Zheng.

On a third-party complaint platform, entering the term “free trial” yields over 19,000 complaints, with most expressing frustration with various app software practices. These grievances revolve primarily around unexpected immediate charges after initiating a free trial, early fee deductions before the trial ends, and automatic renewal sign-ups without notification.

Case examinations reveal a familiar pattern: upon downloading and logging into these apps, users are greeted with offers of “3-day free trials” or “7 days for 1 RMB,” sometimes with pop-ups during usage.

Several users have withheld seeking redress due to the relatively minor charges and the cumbersome process involved. Additionally, the sheer difficulty of contacting some app customer service lines has led many to accept their losses as expensive lessons learned.

Consumers have been raising concerns that the services offered and charges levied by businesses often grossly misalign with the advertising content, potentially constituting false promotion. If further evidence proves intentional misleading or concealment by the businesses to induce customers into false agreements, it might constitute consumer fraud, thereby opening avenues for potential punitive damages. “Southwest University of Political Science and Law Associate Professor of Economic Law Ma Yong said.

Blink-and-you-miss-it paid hints, all are deceptive tactics

The pitfalls of “free trials” are numerous.

Mr. Tang, who resides in Beijing’s Fengtai district, recently found his account inexplicably charged 40 yuan for a subscription. It took him a while to remember that he had tried out a dynamic wallpaper app two weeks prior. According to a screenshot provided by him, the app’s page read: “1 yuan for 7 days” (in very large font) alongside “Immediate Access” (in large font), with “7 days later, auto-renew at 11 yuan per month, cancel at any time” marked in a font size about a quarter of the larger font.

“I thought 1 yuan for 7 days was a bargain, and if it was good, I wouldn’t mind paying 11 yuan for another month,” said Mr. Tang. Yet, to his surprise, on March 13th he was directly billed 40 yuan for a “Super Membership Quarterly Fee”.

“When did I become a super member?” Mr. Tang was puzzled. He contacted the app’s customer service, and they initially tried to deflect with “the specific display page is the main reference”. It was only after persistent questioning that they sent him an image with a red arrow pointing to “Complete screenshot can be seen by clicking ‘Membership Activity’ at the top right corner.”

After navigating through several layers, Mr. Tang found the information about the “first two weeks at 1 yuan per week, followed by automatic renewal at 40 yuan per quarter”. After thorough comparison, and even re-purchasing to try again, Mr. Tang realized that during the payment for the “1 yuan 7-day trial”, the payment instructions in fine print briefly appeared stating “first two weeks at 1 yuan per week, then automatically renew at 40 yuan per quarter”, but this was almost instantaneous and partially obscured, making it very difficult for users to notice.

“It’s all deceptive strategies, using ‘big font’ to catch the eye and ‘small font’ to express more important information, then performing a bait-and-switch visually,” Mr. Tang said, calling it outright deceit.

Interviewed experts believe that businesses lure consumers into making involuntary payments through unclear and incomplete statements, infringing upon the consumer’s right to information and choice.

“Consumers see contract terms that differ from those appearing after page transitions, with the core content of these standard terms passing by in a flash, obscured and typically unreadable for most consumers, leading them straight to the payment page without having time to understand the actual terms. This smacks of fraud,” said Wang Tianfan, Associate Professor at the Beihang University School of Law.

Ms. Zhang from Zaozhuang, Shandong, was charged 198 yuan for a “free trial” of an app. She told reporters that during the Spring Festival this year, she wanted to use the “collage” feature of an app, which advertised “three days free trial, 198 yuan a year, cancel anytime”. She had barely clicked to start the trial before she was billed.

It was only later she remembered that she had also used the app’s “free trial” six months before. She had made one collage and then immediately canceled the service, all within less than ten minutes.

“The three-day trial, how is it counted? Is it considered three days after one use, or does it accumulate?” Ms. Zhang looked through the app’s user agreement, which contained no explanation of the free trial terms, and when she sought to contact customer service for a refund, she found no phone number within the app—only an email address and a feedback box were available.

Looking into the service agreement, the reporter saw it clearly stated that “once membership is purchased, it implies you have utilized the product”.

Searching for this app on a third-party complaint platform, there were 163 complaints about the app’s customer service inaction and lack of support.

Ma Yong thinks that, as there was no change in the app’s promotional language and button text— “three-day free trial”—between the two uses, it was reasonable for consumers to believe that the second use would still be a free trial.

“Merchants have not fulfilled their obligation to provide clear prompts. There’s a difference in meaning for consumers between clicking ‘trial’ and ‘subscribe’; ‘subscribe’ indicates the consumer is entering into a formal contract. Merchants should provide different links for ‘trial’ and final ‘subscription’, and when consumers’ trial period expires, they ought to be alerted clearly,” said Wang Tianfan.

Clarifying obligations and strengthening supervision, marking explanations in a prominent manner

The journalist found that app “free trials” often involve standard terms, yet some merchants do not provide clear explanations of the terms for free trials or discounted offers, and many consumers do not read through these terms, resulting in frequent entrapment in “free trial” pitfalls.

In response, experts believe that businesses should clearly and precisely lay out the terms explaining the free trial, and remind consumers in a conspicuous and comprehensible manner.

Ma Yong believes that for a thorough explanation that ensures consumer awareness, businesses should clearly mark the explanation content on advertising pages, product pages, and payment pages, instead of hiding it within standard terms that many consumers do not scrutinize. Otherwise, it’s an indication of business negligence.

“Merchants should reasonably alert consumers to standard terms with significant implications. If they fail to provide ‘reasonable alerts’, consumers may argue that such terms do not constitute a part of the contract,” said Wang Tianfan.

Experts also point out that, currently, Chinese laws and regulations have numerous provisions regarding automatic renewals but few concerning free trials. As a result, compared to automatic renewals that typically revolve around consent, notification, and cancellation processes, regulating free trial services is more complicated.

According to Ma Yong, free trials and discounted uses are relatively new marketing strategies with complexities such as the length of trial periods, limitations during trial periods, and strategies for converting users after trial periods end. These details vary significantly among businesses, making it difficult to standardize. The law, being inherently reactive, is currently not fully equipped with sufficient rules and standards.

To regulate such chaos, Ma Yong believes that multi-party efforts should be made to form a regulatory synergy. ## Establishment of Clear Standards for Free Trials and Discounted Services

Relevant authorities should develop practical implementation guidelines for free trials and discounted services, clearly specifying the obligations that businesses must fulfill when providing such services. These guidelines should ensure that the provisions are clear and specific, facilitating daily supervision by law enforcement agencies and providing a solid legal basis for consumer rights protection.

“Relevant departments should strengthen daily supervision of the app payment process, publicize typical cases to urge platforms to rectify issues promptly. Additionally, they should establish a convenient and efficient online dispute resolution platform to offer consumers a low-cost and efficient alternative for resolving disputes without litigation,” said Ma Yong. He also emphasized the need to continue improving corporate self-discipline and credit system construction. Fostering transparency principles and standard systems for automatic renewal, guiding companies to proactively disclose trial terms, and strictly prohibiting consumer deception.

“Consumers should also be cautious when ‘trying out’ services, thoroughly understanding the trial period set by businesses and the corresponding consequences afterward. If not planning to continue using the app, they should promptly ‘unsubscribe’ or ‘refuse to purchase.’ Businesses should not complicate the process of ‘opting out’ compared to ‘subscribing,’ advised Wang Tianfan.”

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