New Mastercard rules stop automatic charges when free trials expire


If you’ve ever used your credit card to sign up for a trial product or service, you know that the company is pretty much banking on you to forget about it so they can continue to charge you. Well, new Mastercard free trial rules mean the merchant can’t automatically bill you after your initial subscription runs out.

Mastercard’s end to continual charges after a free trial is not just because the company wants to do consumers a solid. No, the wrangling that often occurs when a credit card holder tries to dispute billings stemming from a trial can take a toll on banks as well.

Mastercard stops merchants from automatically charging after free trials end

So Mastercard, in what we hope will be emulated by other credit card companies and banks, is taking the unprecedented step of requiring merchants to confirm that consumers who have signed up for trials in turn want to keep their subscriptions.

After a free trial expires, it will be the merchant’s responsibility to get the card holder’s approval for billing for a product or service to resume. That means customers will get notification — via email or text — pertaining to all the transaction details, including, the payment date, transaction amount, merchant name and, most important, “explicit instructions on how to cancel a trial,” Mastercard says in a news release.

Here are 3 things the Mastercard free trial rules give consumers

  • Cancellation instructions: Each subsequent payment will come with an emailed or text receipt that includes “clear instructions” on how to cancel the trial.
  • Mandatory merchant contact info: As an additional transparency, Mastercard is mandating that all charges on your statement have the merchant’s contact information, including website or phone number of the store where the point of purchase was.
  • Consumer protection: Mastercard also has a “Zero Liability” policy, which states that the card holder is not responsible for unauthorized or fraudulent purchases or charges.

Mastercard free trial rule: What are the exceptions?

As with any great deal, Mastercard is not extending this rule to all subscriptions. The rules cover physical products like skin care or health care cosmetics. What’s not covered are streaming services and other digital products. So that means free trials on Netflix, Hulu, YouTube TV and the like aren’t eligible for the Mastercard free trial offer.

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