Isn't it annoying when you sign up for a free trial, and forget to cancel before the company starts billing you? Mastercard apparently thinks so, because it will no longer allow the practice on its accounts.
The credit card company this week announced a new policy requiring merchants to get a cardholder's approval at the end of a trial before they start billing. Companies must send the cardholder an email or text that includes the transaction amount, payment date, and instructions on how to cancel.
"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," Mastercard wrote in its announcement. "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."
The new policy also requires companies to send cardholders an email or text receipt for every transaction that includes instructions on how to cancel the subscription. Plus, every charge that appears on the customer's statement must now include the seller's website URL or phone number.
"Free trial offers can be a legitimate and useful way to increase sales and improve consumer satisfaction," Mastercard wrote. "The new rules will help in increase transparency and ensure an outstanding experience for cardholders."
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It remains to be seen whether other credit card companies will follow suit.
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