Are You Agreeing To A Negative Option Plan? | Attorney General - State of Colorado

Are You Agreeing To A Negative Option Plan?

A lot of products, especially books, records, and videos, are sold through what are called “negative option” plans. Under a negative option plan, products are automatically delivered to you unless you affirmatively indicate that you do not want them. Legitimate book or record clubs, for example, will send you a new selection each month unless you previously indicated that you didn’t want the selection or were canceling your participation. Other, illegitimate companies may try and bill you for goods you did not order but were sent to you anyway.  

With the development of the internet, companies have been offering more and more ‘Free Trials’ requiring the buyer to spend little to no money on shipping and handling fees in order to try a product, but consumers should be aware of the pre-checked sign-up boxes and the included terms and conditions.  By signing up for the ‘free-trial,’ consumers may be agreeing to monthly shipments and reoccurring charges on their credit cards unless they cancel.  They may also be agreeing to strict cancellation terms that make cancelling nearly impossible.

Negative Option Plan Tips:

  • Do Your Research – Research the company thoroughly, checking their complaint history to see if others have had trouble with the free trial as well as looking for the terms and conditions and reading them carefully.  Be aware of pop-ups, if you’re browsing online a pop-up could lead you to another companies’ website.
     
  • Don’t Click To Fast – If you decide to sign up online, don’t click through the order form too fast.  Look for pre-checked boxes and read carefully, you may be giving the company permission to send you more products that you’ll have to pay for if you don’t cancel.  You may also be agreeing to a strict cancellation policy.
     
  • Watch Your Credit and Debit Card Statements – Closely monitor your bank statements for any unknown charges as well as any reoccurring charges.  If you see charges you didn’t agree to contact the company directly and then contact your financial institution.

If you have been a victim of a negative-option scam or wish to report suspicious activity, please file a report here.