This perpetual billing stems from giving out your credit card number for a free trial. “You can cancel at any time,” the pitch always says, and of course you can – but people often forget. It’s called a business plan, but it’s more like a business scam. For instance we recently got a pitch from Netflix for a free month of their movies and shows. Now we have nothing against Netflix and in fact were once customers, but to get the free month we had to give them credit card info. What are the chances that after the week is up we’ll forget to cancel the service? For us, pretty good. In fact, we would guess that the percentage of people who forget to cancel these free offers is substantial.
But there’s a way to avoid this kind of hit, and here it is: Use PayPal. If you don’t have a PayPal account – and millions do because it’s used frequently for Internet transactions — you can register for one for free at PayPal.com. To take yourself off the hook for recurring payments, log into your account and click the picture of a gear in the upper right corner. Click “preapproved payments,” then click the name of the merchant, and click “cancel.” Three fourths of the time we forget to cancel continuing payments and we’re sure we would have forgotten Netflix too if we hadn’t done the PayPal cancellation as soon as we signed up. By the way, when you do this cancellation, you are still signed up for the free trial.
With less reputable companies, cancellation can be crucial. According to an article at Nasdaq.com, some companies are able to keep charging you even if your credit card has expired or you cancelled it. Through credit agencies, they are linked to you and can get the new credit card information. If this happens to you, contact your credit card company and let them know you didn’t authorize the charge. Of course that means paying close attention to your monthly statements.