Mastercard puts an end to automatic billing after free trials
Mastercard says that consumers who sign up for free trials will no longer be automatically billed once the trial ends.
“No one wants to be unsatisfied with a product after paying for it. For some consumers, a free-trial is a great way to test out a new product and get comfortable with it before making a purchasing decision. And with so many merchants offering free trials, they’re becoming the new norm.
“However, sometimes a free trial can unwittingly turn into a recurring subscription that is difficult to cancel. These situations can be frustrating and costly for both consumers and their banks,” it said in a statement.
Mastercard said it is introducing rules for merchants that offer free-trials.
The rule change will require merchants to gain cardholder approval at the conclusion of the trial before they start billing.
“To help cardholders with that decision, merchants will be required to send the cardholder – either by email or text – the transaction amount, payment date, merchant name along with explicit instructions on how to cancel a trial,” it said.
For each payment thereafter, the merchant will have to send a receipt to the cardholder for each transaction by email or text message with clear instructions on how to cancel the service if the consumer so desires.
In addition, all charges that appear on the cardholder’s statement must now include the merchant website URL or the phone number of the store where the cardholder made the purchase, Mastercard said.
“The new rules will help in increase transparency and ensure an outstanding experience for cardholders. In addition to these changes, Mastercard cardholders are also covered by our Zero Liability policy which protects them against unauthorised purchases or charges,” it said.
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