Beware of “Free” and “Trial” Mobile App Charges Read the Attached Terms Carefully to Avoid Loss

17 February 2020
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Beware of “Free” and “Trial” Mobile App Charges Read the Attached Terms Carefully to Avoid Loss

With different types of easily installed mobile apps covering a broad range of usages, mobile apps have become an indispensable part of daily life. However, complaints filed to the Consumer Council revealed that there were cases where free download would automatically authorize subscription to the programmes and enable payment instantly; some would automatically subscribe to “monthly-paid annual plan” and penalty would be incurred if not cancelled before the expiry of the trial period; and deletion of the apps could not cancel the subscription and consumer only learned about the subscription fee upon receipt of the next phone bill but failed to seek for a refund due to late cancellation.

The Council advises consumers to beware of those purported free paid mobile apps. Before downloading, consumers should read the relevant terms on charges and cancellation, and to understand if any surcharges with automatic payment will be incurred and after the trial period. In addition, consumers should enhance their knowledge about the security setting in their mobile phones and activate the “ask before purchase” or secondary confirmation functions such as input password on every purchase, and even turn off the in-app purchase function to protect their own interests. The Council also urges app developers to enhance information transparency, including a clear listing of free trials expiration date, details of subsequent charges, and correct steps to cancel subscriptions; and also issue subscription reminders to consumers proactively before trial period ends to avoid transaction disputes.

Case 1: Deleting the app does not mean termination, telecom-service providers only help collect payment but do not handle transaction disputes

The complainant downloaded a clerical app through mobile app sales platform A to enjoy a 7-day free trial offer and deleted the app before the expiry of the trial period. The complainant later found that $238 has been charged automatically in the phone bill. A staff of the concerned telecom-service provider emphasized that the company was authorized to charge the mobile app fee according to the purchase record on behalf of the app developer, and any dispute should be directed to either the mobile app sales platform or the app developer. After failing to get refund from mobile app sales platform A, complainant thus sought assistance from the Council.

From the sales policy, it stipulated that the refund application must be submitted within 48 hours from the date of purchase and the complainant eventually failed to get refund, but the telecom-service provider has assisted in cancelling the subscription to avoid incurring any surcharge.

Case 2: Automatically charged upon data input in free-download fitness app

The complainant downloaded a fitness app through a mobile app sales platform B. After inputting information such as fitness target, height, weight and habit, the complainant received a transaction notification of $938 via SMS after fingerprint verification was made. Mobile app sales platform B later replied that the payment was the annual subscription fee of the fitness app.

The complainant was dissatisfied that she was charged before she had started the trial use, whereas the functions of the fitness app are merely basic such as making a fitness plan, regular reminder on walking, running or drinking water. Later, the complainant requested the related platform to follow up her case after finding many negative reviews online.

The mobile app sales platform B later agreed to make a one-time special full refund, but reminded the complainant to cancel the application subscription service to avoid being charged again.

Case 3: Unclear fee details on subscription page that cancellation of subscription will incur penalty for breaching the contract

The complainant registered to the free trial offer of design software programme of Company C via email and he was then diverted to credit card payment page showing “Free trial for first 7 days. $158 per month after trial”. Noting that charge would be incurred after the trial period, the complainant inputted the required information to complete the installation. 7 days later, the complainant received an email from Company C stating a credit card payment invoice of $158. The complainant then cancelled the subscription but was notified by Company C that he breached the contract and had to pay a penalty fee.

The complainant thought the mobile app was charged monthly which could be cancelled anytime. She did not realize there was a subscription option in the fee charging page until she repeated the registration steps to find that there were 3 payment plans, including “monthly paid annual plan at $158/month”, “pre-paid annual plan at $1,776/year” and “monthly plan at $248/month”. The default payment option was “monthly paid annual plan”. The complainant considered that the unclear descriptions would cause confusion easily, and it would be better to display “$158 x 12 months” and to show all payment options for selection. The complainant stated that it was understandable that a one-month monthly fee would be charged if cancellation was made after trial, but she was not satisfied with the auto-subscription of annual plan. With the Council’s help, the case was resolved with subscription cancellation without penalty. 

Consumers installing mobile apps and cancelling the subscription service are reminded to pay heed to the following:

- Before installation, read the app’s introduction and other user reviews in details. Also pay attention to information relating to trial period, charging terms, automatic subscription and cancellation policy etc.;

- Review carefully the application request for access to data such as phone contacts, photos / media, location, etc. If the app requires confirmation steps such as face recognition, fingerprints etc., consumers should pay extra attention as it may have the opportunity to authorize the app to use the credit card information stored in the mobile phone for transactions;

- Check the "Subscriptions" and "Purchase Records" fields in the mobile phone from time to time, as well as the phone bills and credit card monthly statements. If any unknown charges are found, contact the corresponding mobile apps sales platform or app developer as soon as possible;

- Subscription cancellation could not be made by merely deleting the app in the mobile phone. Cancel the programme service according to the instructions of the app especially those with a trial period. Such instructions must be made within the specified time to completely stop the app and any pre-set subscription instructions;

- Children and elders may not be savvy in mobile phone operations. Family and friends should assist and adjust the settings of mobile phones to prevent unnecessary charges caused by misuse of paid apps.

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