Washington, DC – Visa Inc. joined the Federal Trade Commission and the Better Business Bureau to alert consumers to online deceptive marketing practices associated with free trials with a negative option feature. According to a Visa survey, 29 percent of American consumers have fallen victim to deceptive marketing when unscrupulous e-commerce merchants require them to cancel or opt-out of a recurring charge for future products or services.

With free trials with a negative option feature, a company takes a consumer’s failure to cancel as permission to begin charging. While many merchants use this billing process appropriately, others pre-check consent boxes, bury the details of the offers in the terms and conditions and make cancellations or returns difficult, catching consumers in a cycle of recurring charges for products and services they do not want.

“Most e-commerce merchants care about their customers and conduct business fairly, but even a few bad actors can cause consumer distrust,” said William M. Sheedy, Group President, The Americas, Visa Inc. “We want to let consumers know more about the protections they have against these types of practices and how to pursue a reversal of charges if they’ve been charged improperly.”

Visa monitors its payment network to identify merchants with excessive levels of cardholder disputes which may indicate the use of deceptive marketing practices. In fact, merchants who use deceptive marketing practices have up to 20 times as many consumer disputes as the average e-commerce merchant. Visa requires the merchant and its bank to take corrective action to reduce excessive consumer disputes, or risk termination of Visa acceptance privileges.

According to Bill Thomas, President of the Better Business Bureau of Central Indiana, consumers should research the business before they buy. “Before you ever provide an online merchant with your debit or credit card information, clearly understand the terms and conditions of your purchase, and use our Web site, bbb.org, as a resource to check the company’s Reliability Report® with the Better Business Bureau.”

Visa, the FTC and BBB offer tips to online shoppers on how to spot deceptive free trial offers and deceptive negative option features, and how to deal with unauthorized charges:

• Take time to read and understand all terms and conditions, so a free trial doesn’t turn into a costly purchase you didn’t intend to make.
• Pay particular attention to any pre-checked boxes before you submit your payment card information for an order. Failing to un-check the boxes may bind you to terms and conditions you’re not interested in.
• Review card statements when you get them for any unauthorized charges, and notify the card issuer promptly of any unusual activity or unauthorized charges.
• Try to resolve the situation with the merchant. If you’re unsuccessful, contact the card issuer immediately to dispute the charge.

David Vladeck, Director of the Bureau of Consumer Protection said, "Online shoppers: If you see charges on your statement or debits that you didn't authorize, fight it. Start by contacting the merchant. If you are unable to contact the merchant or they can't or won't help, call your card issuer and then file a complaint with the FTC. You can do that online at ftc.gov or by phone at 1-877-FTC-HELP."

The FTC has outlined five principles regarding the appropriate use of negative options, which call for:

• Disclosing material terms in an understandable manner, without making them unnecessarily long or inconsistent;
• Making the disclosures clear and conspicuous by placing them where consumers are likely to look on Web pages, by labeling disclosures (and links to them) to indicate their importance and relevance, and by using easy-to-read fonts and colors;
• Disclosing the offer’s material terms before the consumer incurs a financial obligation;
• Getting consumers’ affirmative consent to the offer by, for example, having them click “I Agree” And without relying on pre-checked boxes;
• Not impeding the effective operation of promised cancellation procedures and honoring cancellation requests that comply with such procedures.

Consumers who think they’ve been victims of deceptive marketing and who haven’t been able to resolve the issue directly with the merchant should call their card issuer to dispute the charge. They also may report their experiences to the FTC at www.ftc.gov/complaint or their local BBB at www.bbb.org. More information is available at www.visa.com/negativeoption.

The mission of the Better Business Bureau is to provide active leadership to the community to promote business integrity and ethics; build consumer confidence in the free enterprise system; and encourage cooperation between business and consumers. The Better Business Bureau of Central Indiana is one of 137 regions in North America that makes up the Council of Better Business Bureaus. Visit the Better Business Bureau online at www.bbb.org.