Dec 09
30
Let’s Talk About Continuity Programs
This may not affect many of you who are network marketers but if you’re also selling any of your own products (ebooks, etc.) then you will want to be aware of it.
Some of you may have heard that the BBB, the FTC and VISA have started targeting businesses that use free trial offers that turn into paid subscriptions at the end of the trial period.
Let’s be clear about this. There is nothing wrong with giving someone a free trial. And there’s nothing wrong with telling someone that they have to cancel a service within X time period if they don’t want
to be billed.
The FTC agrees: “Free trial marketing can be convenient for consumers — if the terms are spelled out beforehand,” said David Vladeck. He’s the FTC’s Director of Consumer Protection.
The key point is in the latter half of his statement: “if the terms are spelled out beforehand.” As expected, it’s not the honest and ethical marketer who needs to be worried; it’s the shady marketer who’s got so little confidence in his/her own product that they feel like they need to “pull one over” on the customer.
Simply put, this FTC/BBB/VISA campaign is against companies who try to hide the terms.
For instance, in November, the FTC reached a settlement with a company called Commerce Planet.
What were they doing? They offered a “free auction kit” that would teach them how to make money on sites like Ebay. Commerce Planet was charged with accusations of “unclear information regarding the trial”. By signing up for the “free online kit”, consumers were not clearly made aware that they were also signing up for a monthly fee of $59.95 for an “online supplier” program if they didn’t cancel within a few days of the order.
Bottom line: these people SHOULD be getting some attention from the FTC. Because there’s no excuse for not being completely up-front with your customer.
So, the bottom line is this: if you’re selling a product, service or subscriptions, there’s nothing wrong with offering a free trial that turns into a paid subscription. There’s also nothing wrong with opting someone into a paid subscription as part of a one-time purchase as long as they understand it.
But that’s the key, make sure they understand it! Use video. Use audio. Make it clear to the consumer what the terms of the transaction are and you won’t have to worry about the FTC accusing you of trying to pull a fast one.
