Bank Warns Public On 'Free Trial Scams'

Royal Bank of Scotland (LSE: RBS.L - news) (RBS) has called on regulators to intervene after accusing firms offering free product trials of taking its customers for a ride.

The bank said that since June last year it had helped 37,000 customers halt charges, usually £80 a month, that were hidden in the small print in 30-day 'free trial' deals for beauty and nutrition products.

It said that the so-called deals - often advertised through social media - "took advantage of consumers" who believed they were only handing over a small fee for postage.

"Clever advertising and pop-ups on social media websites lure customers into what they believe to be a free trial of a cream or tablet.

"They are asked to enter their card details to pay a small fee to cover postage and packaging.

"In reality, by providing their card details and entering the free trial they are agreeing to a recurring subscription, if they do not cancel within the trial period.

"At its worst point, RBS and NatWest were receiving over 390 calls a day from customers to complain of charges of around £80 a month being applied to their accounts that they did not recognise.

"Customers receive the goods but don’t know about the recurring costs associated or that they have to stop the trial.

"Subscription details and charges should all be laid out in the terms and conditions (T&Cs) of the agreement, but the bank has found instances where the T&Cs only appear after the customer has agreed to them, where they’re hidden at the bottom of the page or where they’re greyed out making them near impossible to find.

"The bank estimates that at its peak this was costing customers over £30k per day and over £2.9m in fees since June last year."

RBS said it had raised the issue with Visa (Xetra: A0NC7B - news) , MasterCard and Cards UK and provided them with the details of merchants causing regular complaints and as a result over 1,000 companies had been stripped of their acquirer relationship.

Terry Lawson, head of fraud at RBS added: "Too many of our customers have fallen victim to these scams.

"We want to help raise awareness so that both our customers, and the wider public, are aware of these scams and look out for unclear or confusing T&Cs."