When companies offer services for ‘free’, it is often the result of a money-hungry, ethically-blind company overstepping its bounds. Most services simply are NOT free, despite their claim.
Buyer beware is a good mantra for navigating the waters of ‘free’ services. This posting will highlight common ‘free’ offers and will shed light on some of the unethical marketing practices we see corporations engaged in today.
In most all cases, the company offering the ‘free’ service will only offer it free for a short trial period, then will automatically bill you thereafter. Companies will get you in a contractural agreement and will usually make more money off you- more than recovering their cost of offering something ‘free’ for a limited time.
1. Free Credit Reports
Free credit reports are never free. Notice the above signup form from a popular ‘free’ credit report website. It asks for all of your contact information on the first page, then when continuing to the next page (after you already invested the time to fill out the first form), it then surprises you by asking for your social security # and credit card information. This is their initial explanation for that:
Your credit card will not be charged during the free trial period. However, valid credit card information is required to establish your account.
Then, more hidden is the real legal agreement text:
When you order your free report here, you will begin your free trial membership in Triple AdvantageSM Credit Monitoring. If you don’t cancel your membership within 9 days of enrollment, you will be billed $14.95 for each month that you continue your membership. If you are not satisfied, you can cancel at any time to discontinue the membership and stop the monthly billing; however, you will not be eligible for a pro-rated refund of your current month’s paid membership fee.
That hidden legal agreement text no longer calls the service a ‘free trial’, but now a ‘membership’. Nine days is quite a short window of time to ‘cancel’ the membership- in fact, it’s only 1/3 of the way through the ‘free trial’ period. In the rare case a person is diligent enough to call within the limited 9 day timeframe, good luck on finding a live person on the phone. You can guarantee very long hold times, talking to multiple representatives, and perhaps having to call back a few more times just to ensure the service is indeed cancelled. Representatives are trained to do everything possible to not let you cancel, so you can bet it will be a frustrating experience trying to cancel.
It no longer seems worth it after learning the true meaning behind their words ‘free credit report’. It’s almost inevitable that you will pay them money.
2. Free Website Services
Trails.com is one of the most spammy and unethical websites I’ve seen.
Unfortunately, they rank super high in Google under lots of keywords, so they get lots of traffic. What happens is you might find a page like this.
Then, when you click to see the map and directions, you get a free trial signup page…
At the bottom of the signup page, you can also note that you are agreeing to receive spam from third parties, which they waive responsibility for, as well as saying…
For your convenience and to ensure that your access to your Trails.com subscription remains uninterrupted, unless we hear from you, we will automatically renew your subscription(s) at the expiration of the then-current term. If you elected to pay for the subscription with your credit card, Trails.com will charge your card on file for the cost of another term at the then-current rate using the information you previously provided us by phone or on our web site. You will not be notified in advance of your impending renewal.
It’s so nice of them to take, store, and auto-bill your credit card as a ‘convenience’ to you so your service ‘remains uninterrupted’. That’s one way to look at it.
And finally, on the next page, lo and behold, the ‘free’ signup page asks for your credit card. What a surprise.
3. Free Magazines
Free magazine offers are old school now. Yet, the same old marketing trick continues to be used and people continue to fall for it.
Free magazine offers can be found in a variety of places- through websites, direct mail, in magazines themselves, and in odd places like in grocery store halls near the restroom.
The trick is to get you to signup- which may open the floodgate for lots of junk mail- then later surprise you with a bill. Sometimes they will say you get only 1 issue free, but will go ahead and send you a few extra issues of the magazine. They will of course bill you for it and hope you will pay it, perhaps from feeling guilty for receiving the extra magazines.
4. Free Windshield Rock Chip Repairs
You may have seen ‘free rock chip repair’ tents in shopping area parking lots throughout the United States. The trick is they will say it’s free to you, but will bill your insurance if you have full coverage. It’s faulty logic to say it’s free, because you pay for your insurance. It’s also possible your insurance company will deny the claim and stick you with part of the bill or raise your rates.
It it really free? No.
5. Free Computers
Free computer offers still exist today, but this scam was most popular back when CompuServe, Prodigy, AOL, MSN, and other internet dialup subscription services were popular. Stores like OfficeDepot, OfficeMax, CircuitCity, and Best Buy offered huge ‘rebates’ for buying computers with the internet subscription- often claiming to move than cover the price of the computer. The subscriptions were usually 3 year contracts at $25 / mo or so, making a $900 commitment, for example. The rebate was often for $300-$400 or so, making the computer ‘free’, but people didn’t walk out of the store with a free computer. You paid in advance, and later hoped you would receive your rebate.
Of course, rebates are usually outsourced to third party vendors, who often handle the rebate claims carelessly. Ever see your name and address grossly misspelled on a rebate form? Yes, they will do everything possible to not give you your rebate. This allows the retailer to save money while claiming no responsibility when people don’t receive their rebate, since it was outsourced. Unfortunately consumers were led to believe they could get a free computer only through buying dialup internet access- perhaps something they may have thought they would have used anyway, but it cost them dearly.
Some stores like OfficeDepot took the internet subscription trick to a ridiculous point, claiming “Free $300 cash for anything in the store (with internet subscription)”. That’s code for you giving them $600. Incidentally, the FTC investigated OfficeDepot for some of their misleading advertising.
Summary
Those are five ‘free’ services you want to avoid. There are numerous marketing scams to beware of like credit watch services, rebates, free cell phones, free music CDs (i.e. BMG), add-ons, bad contracts, and more. If you mainly avoid anything free that involves signing a contract, you’ll probably be in good shape.
Thank you for the advice, but I would also like to warn consumers about merchants such as FYE, Books-A-Million and EB Games. Those FREE magazines are a scam when you use your credit card. Also, I’ve had a lot of experience with rebates, and know the proper way to send them off, but out of 10 rebates, I have yet to receive anything from FYE.
Hi Trent, a word about the rock chip repair. Taking issue with the fact that it’s referred to as ‘free’ is really splitting hairs. The logic is sound that it is free to the customer if they are already paying for their insurance, and their rates do not increase as a result. If there is no net increase in cost to the customer as a result of the repair, it’s not illogical to say that it’s ‘free’ to them. However, if you prefer to look at it from the point of view that they’re already paying for it, so why not use it, that works too.
Yes, you’re correct if you assume that I do rock chip repairs! I understand it a touch better than you probably do. Almost all insurance companies require authorization prior to doing a repair, which means that your suggestion that the insurance companies will “deny the claim and stick you with the bill or raise your rates” is really not too realistic. We get the insurance provider on the phone to speak with us and the policy holder, and they approve the claim before we even touch the windshield! If by some very unlikely circumstance a repair is performed that is not authorized, the insurance provider just won’t pay us. They’re not going to pay us for an unauthorized repair and then bill the policy holder. On a few occasions I’ve started a repair before I verified coverage and/or got authorization, and I’ve ended up not getting paid for it. Totally my fault, but not a big deal, it’s pretty rare, and not getting paid for a repair or two out of hundreds doesn’t make much of a difference.
Almost all insurance providers do not view rock chip repair as a claim that has any effect on a policy holder’s rates whatever. This is because they consider this type of repair a ‘faultless’ repair that is covered by the comprehensive coverage of a policy. Almost every insurance provider also waives the deductible for these repairs and allows for up to three repairs to be done at the same time twice a year. With absolutely no effect on the policy holders rates.
There are a few companies that do not offer their customers the same level of service in this area that their competitors do, State Farm being the largest. In cases where a customer has one of these very few providers, we tell them immediately and offer to do the repair for cash so as not to involve the insurance. If they see the value in the repair, they do it, if not, no big deal. But this is rare, and has everything to do with the insurance company, not us.
I totally agree with your cautions, especially about the rebates. I’ve been burned with those before, and it’s so frustrating! No one should be worried about going to a free rock chip repair tent. The worst thing that can happen is that when you get on the phone with your insurance, you find out that your policy doesn’t cover the repair, and you have to pay the repair person yourself (this really is pretty rare), or you leave having wasted 10 minutes. If you have State Farm, just be prepared to pay the guy doing the repair. Don’t hate the messenger, just call and complain to State Farm!
There are still some honest people out there. Incidentally, all auto glass shops that replace windshields also do rock chip repair, and they go through the insurance exactly the way the guys in the tents do, with the exception that they’d rather sell you a new one. A tent doesn’t mean it’s a scam. It’s just…colder in the winter…
Thanks for your comments, including this one:
“…The worst thing that can happen is that when you get on the phone with your insurance, you find out that your policy doesn’t cover the repair, and you have to pay the repair person yourself…”
Yes, in other words, the rock chip repair is not free, and that is why it’s unethical to call it free.
Nicely Done Guys, Youre The BestI have Many Things To Show
Well said Trent. I think that the best way to sum it up is to always read and understand the fine print. Nothing in life is free…and the old addage “If it sounds to good to be true, it probably is…” was never more true than on todays internet!
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Thank you for exposing trails.com…. I woke up a few days ago to a $50 fee that I had not agreed to or been notified of, especially because I was required to sign up for this website for a class I am taking. I have not received any response to my complaint emails or even the phone calls (the number which I had to find on another site since they conveniently do not have one listed.) What a disgusting scam!!!!!!!!!!!
My laptop is loaded with Microsoft Vista. I really want to get off this crappy OS. Can I go back to XP, or should I just move up to Windows 7 at this time? And if I do go to Windows 7, how difficult is the upgrade?
Interesting read. Great post, as always!