On 16th of January MasterCard announced a new policy that is against automatic billing.
There are too many merchants offering free product trials, they’re becoming the new norm, sometimes a free trial is too difficult to cancel. These situations can cause a lot of problems for consumers and their banks.
That’s why MasterCard will protect customers from the billing period after a free trial for physical products, such as skincare or healthcare subscription. The company announced a new policy that will require sellers to get authorization from customers before hitting with recurring charges for subscriptions. It will also require companies to provide customers with monthly updates that include pricing and clear guides on how to cancel if the consumer needs it.
When that free trial comes to an end, the merchant will be required to send the consumer a text or email notifying that customer will have to pay to continue the subscription. That message has to include the subscription cost, payment date and merchant name. The message must be accompanied by instructions on how to cancel the subscription.
Even if consumer accepted to pay for the subscription, the company has to provide consumers with monthly receipts that show the consumer the monthly cost. Those receipts will also have to include a guide on canceling the subscription.
But it seems this protection won’t help customers try digital subscriptions and not get hit with a recurring cost if they forget to cancel it.
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