Business Guide to Online Trial Offers, Product Memberships, and Negative Options
In FY 2016, the Division's most common complaints include allegations of misrepresentations or deceptive practices in internet offers and sales. Many consumers complained to the Division about signing up to receive a trial of a product for a small shipping fee. After receiving the item, the consumers were surprised when they were subsequently charged for the trial product, and then received monthly payments for an automatically renewing order. In the course of investigations, the Division observed terms listed on these websites that described a negative option agreement. The terms were either not seen by the consumer, or directly contradict representations in the advertising. Other consumers could not obtain a refund for properly returned merchandise even though these sites claimed to be risk free, or offered satisfaction or money-back guarantees.
The purpose of this business guide is to help businesses avoid deceptive practices in the areas of trial offers and/or negative options. The Division hopes to encourage business to evaluate ways to properly inform consumers that they are entering into a recurring monthly agreement, and avoid improper conduct in advertising. This guide uses the word "deceptive" as used by Utah Code §13-11-4 . When an action is described as "deceptive," the term is meant in its legal sense as a violation of the Utah Consumer Sales Practices Act.