Regulation & Compliance‘Free trial’ companies take unauthorised payments from customer accounts

'Free trial' companies take unauthorised payments from customer accounts

The Royal Bank of Scotland is has unearthed a money-making ploy which sees companies taking money from customer accounts without clear warning, and is urging regulators to take action.

The Royal Bank of Scotland is has unearthed a money-making ploy which sees companies taking money from customer accounts without clear warning, and is urging regulators to take action.

Some companies claiming to offer free trials of nutrition and beauty products are actually taking large payments from customers a few weeks later, RBS chief executive Ross McEwan told the Financial Times.

British banking customers have also complained that payday loan companies are taking fees from their accounts when they least expect it.

McEwan has called on lenders to stop financing companies that take payments from customer accounts without authorisation.

RBS became aware of the issue after an increase in customers complaining that companies were charging a small upfront free for a 30-day trial of sample products, then taking a larger payment, normally of around £80, at a later date. Customers had inadvertently agreed to longer-term contracts with high monthly payments thanks to a clause buried deep in the terms and conditions.

Customers have also been unable to find out how to stop the payments, or to even contact the company.

RBS was receiving about 400 calls a day last August from affected customers. Now, after the bank engaged with Visa, MasterCard and the UK Cards Association which have clamped down on the matter, the number of calls has dropped to 50. RBS is ensuring affected customers do not lose any more money to the scheme, but could not refund the funds already taken.

Still, around £2.9m in was taken in this way from 37,000 RBS customer accounts between June and January this year. AgeRenew, Aloe Vera Cleanse and Healthy Ketone were among the biggest offenders in January, the bank said.

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