RCMP Says Free Trial Scams Are Fraudulent, But Credit Card Companies Make Victims Pay

Marketplace gets dozens of emails from Canadians every week about consumers and disappointing schemes of all kinds.

Ripoffs for renewal.

Move corporate inconvenience.

Dubious remedies in the drugstore.

However, there’s a scam, which produced more angry emails than all the others: the not-so-free facial cream test.

On the market, the audience received hundreds of emails from spectators who received surprise credit card fees that could not be reversed after registering for “risk-free” trials.

What they signed up for, in fact, is a subscription trap that uses sneaky, fine print, and misleading marketing techniques like false articles, buggies of celebrities, such as Ellen DeGeneres and Celine Dion, and fabricated surveys by legit firms to make people pay for products and services they don’t want.

The market has found out exactly how it operates, which includes the motives and methods of the mysterious merchants and marketers involved, why it continues to work with the Better Business Bureau in the past year alone despite more than 26,000 complaints, and what credit card companies can do to stop it.

Costly terms

Judy Mayer of Aurora, Ont., is one of the Canadians who paid a steep price for a great deal.

In January, Mayer was on Facebook when she noticed the Dragons ‘Den star Arlene Dickinson ad on anti-aging cream. To get a “free test,” Mayer paid for the shipping.

Some months later, Mayer found charges on her MasterCard totaling almost $400. The costs came from Rejuva Essence, so she called the company’s customer service line and was told she was charged three additional bottles as specified in the bid’s terms and conditions because she did not cancel her subscription and returned the original sample within 14 days.

“I didn’t know I was supposed to cancel a subscription,” Mayer told Marketplace.

“It wasn’t anything they told me about.”

Mayer insists she never saw a 14-day trial and recurring charges when she signed up for the offer — that is what the government says is a subscription trap.

When Asha Tomlinson of the Marketplace called the customer service of Rejuva Essence, she was told that “You begin the trial period once you place the order. The system thinks that you want to continue your treatment if the trials are over and you have never canceled.”

Tomlinson pointed out, “There are the terms and conditions,” and the information is shown on the Rejuva Essence website, but it’s not easy to find it.

Details about the repetitive costs and trial period of ReJuva Essence can only be accessed via a small and feeble “Terms” link at the bottom of this page as for other face Cream offers.

Mastercard told Mayer that he knew “very well” about these cream companies, but it was impossible to do anything because there were further charges on the Rejuva Essence website.

And Mayer’s experience is far from unique, as Marketplace has learned.

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How the scam works

The scam begins with a merchant who decides to sell a product online, be it face cream, Garcinia Cambogia, or pills with weight loss or teeth whitening. As indicated by the Federal Trade Commission, the products used in subscription traps are mainly irrelevant; after all, the primary purpose is to obtain credit card numbers.

The merchant creates an online site or a checkout/landing page with free anti-aging facial cream trials in this case. In the fine printed form of the terms and conditions, the merchant then enters the recurring fees when the client does not cancel his/her credit card and is automatically charged every month, for hundreds of dollars, after a usually 14-day trial period.

According to the RCMP anti-fraud unit and the Better Business Bureau, the traders change their product names frequently to avoid bad online reviews. The Abella Mayfair products are some of the 371 products the Mounties have uncovered and are Image Revive, Face Replen, Hydroluxe, Chantel St Claire, Renovica, Skin Balance, and Nuvella.

RCMP checker Jeff Thomson says the merchants will also use various credit card detailed names of bank processors. It states that authorities in 14 different countries, especially in China, Latvia, the USA, and Canada, have identified over 312 scheme-related accounts at 84 other banks.

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Door-to-door salespeople of the internet

Sellers, however, require advertising so that people can make use of the power of what is known as affiliate marketing.

Sometimes called Internet door-to-door dealers, affiliate marketers (CPA) are often creative and extremely motivated. They are not paid for otherwise than if they subscribe to whatever offer they push.

The market has found commissions to promote and enable people to sign up for face cream testing for CPA affiliate marketers ranging between $30 and $50.

While many affiliate marketers are working legitimately and morally for top businesses, authorities say that some CPA affiliate marketers use deceptive tools to capture persons in subscription trappings, such as fake news articles with fake celebrity endorsements or fake pop-up surveys that appear to come from reputable sources such as Costco, Air Canada, and Rogers.

Arlene Dickinson from Dragons’ Den told the Marketplace that her name was used to promote facial cream products; she felt physically sick when she found that she knew anything about it.

Dickinson said, “It was awful. “It’s just reprehensible to use my image and to lure people in.”

The lawyers of Dickinson told her they couldn’t stop it because those responsible couldn’t be found.

“They change addresses, locations and even regularly change their website, so… they are slick,” she said.

“I believe the people who have such scams are crooks, hucksters… This is not business, and it’s pure opportunistic bullshit.”

What does the law say?

Book laws are in place to protect Canadians against subscription traps, at least in theory.

Articles 74.01 and 52 of the Competition Act prohibit misleading advertising that may, in the terms and conditions, include deceptive marketing or “recurring charges.”

When it comes to face-scream testing, it is wrong for consumers to see the word ‘free’ everywhere and then discover that there are hidden charges — the general impression is that the offer is free.

Both the trader and the affiliate trader can be held accountable in these kinds of subscription traps, the trader for concealing the charges, and the affiliate trader for trump card creation.

But Barry Elliott from the RCMP’s fraud control unit says it’s not an easy task to find and control those merchants and marketers.

“It would take a lot of work for a researcher to put this package together and receive all information from other countries – they know it, everything would be a nightmare,” Elliott said. “The people responsible figured out how to make it as difficult for us to find this out.”

Role of credit card companies

The fact that credit companies seldom reverse charges compounds the frustration for victims.

Most consumers, including Mayer, who contacted Marketplace for the fraud, could not get their money back.

Both Mastercard and Visa told Marketplace that, in contrast to the RCMP and the Competition Bureau’s fraud control unit, cardholders do not appear to be charged with a fraudulent transaction by zero liability policies.

The customer service from Mastercard told a producer of the Marketplace that, even if they are located in “difficult sites to see,” consumers have to find any charges which may be indicated in the terms and conditions.

But Elliott says companies with credit cards should stop accusing cardholders of the recurring charges hidden under the terms and conditions.

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