Thursday, December 25, 2008

Be careful about free service for a trial period

Some banks offer credit cards to you free of subscription for one or two years. They will impose a hefty annual fee automatically at the end of the free period, without telling you. If you are not aware about it, you have to pay this fee.

Some card holders call the bank and threaten to cancel the card. The bank may waive the fee out of goodwill. They may not.

The same technique is adopted by mobile phone operators and cable television services. They give you a free period of use for some services, and will quietly levy the charge at the end of the period. They hope that the customers will pay for the services out of ignorance.

Here are some tips to avoid paying for these additional charges, if you do not use the services:

1. Decline the service, if you do not need. it. Do not accept it just because it is free.

2. If you want to try the service, put a reminder in your calendar (on the mobilephone or PC). It will remind you to reivew the service at the end of the free period. If you do not need it, you should call and cancel it.

I hope that the Consumer Association (CASE) will make it compulsory for the business to get the customers to agree on paying for the service at the end of the free period. It should not be on an "assumed opt-in" basis. We need to have stronger business ethics.

6 comments:

Anonymous said...

Free gifts to induce purchase of financial products should be banned.
Financial products shouldn't be bought like other consumer products because if bought for the wrong reasons it can have dire consequences, ie financial loss.
It seems MAS allows the FIs to use anythings to sell their products.
Unlike other jurisdictions there are bans on roadshows considered hawking; gifts considered inducement or bribery;restriction on hours and days salesmen are allowed to call or prospect the customers.
In UK commission will be stopped as a form of remuneration to prevent conflict of interest and mis-selling by 2011.
All these measures are in place to prevent abuses, mis-selling and misrepresentation and other malpractices. Even raising the entry requirement is also considered.Local insurance agents are grossly unqualified and incompetent.
Unfortunately our local regulator sees it as investors' business to avoid and fight against the malpractices. It is no surprise the minibond saga got this reaction from the regulator.The FIs and their salesmen have a complete liberty to do whatever they like with consumers with impunity.
More importantly enforcement of the rules is the corner stone of the regulation without which it is as good as no rules.When everybody pays lip service, from regulator to FIs, another minibomb is awaiting to explode.
I believe it will explode in the life insurance sector. With the formation of FISCA the misdeeds, the malpractices and the unethical practices of the insurance agents will be exposed. It will not be a surprise to know that consumers have been taken a ride by their insurance agents all these years without their knowing it.The dirts, the filth uncovered will be so scary that consumers can't believe their so called nice looking, sincere , sweet talking agents have been crooked, dishonest, incompetent and have been squeezing, milking their financial resources for their personal gain.
I hope the defining changing landscape will augur well for the industry and the consumers

Anonymous said...

I agree with you and thanks for the tips you offered. I agree that the manner on how the approach taken by the trade should be checked for the protection of consumers. The "opt out" approach should not be used and consumers must be made known before the next step taken.

Anonymous said...

There is no free lunch. It is a trap to ensnare the greedy consumers who think they are smart.

Anonymous said...

The business world is protected since it learn of this "dirty" tactics from our world class government. Have you all forgotten about the various opt out schemes dreamt out by our talented million dollar ministers? They led the way how our businesses conduct themselves and now have lost the moral authority to say or do anything otherwise.
More Good Years, for businesses!

Vincent Sear said...

I think that it's o.k. to accept free trial period offers to test out the product or service, but be prepared monitor the free trial period and to terminate the agreement after the free trial period expiry if the product or service isn't up to expectation, or is unreasonably expensive after the free trial period.

If it works well during the free trial period and is priced reasonably thereafter, then it's o.k. continue with it as a paying customer.

That said, full information, an informed decision and discipline are essential.

Parka said...

There should never be an "assumed opt-in" for anything in the world unless it provides value without the element of exchange.

In my opinion, the charging of levy at the end of the period is no different from stealing money.

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