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If you’ve got a TV, you’ve probably seen those free credit report commercials in high rotation. Well, as it turns out, the report isn’t really free at all. To get it, you have to sign up for a trial membership in a credit monitoring service. Once that trial expires, you’ll be billed monthly until you cancel. The thing is, you probably didn’t know you were signing up for the membership or when the trial period took place. You may not even spot the charge on your credit card for some time. When you try to cancel, you find that you’re obligated to a one year membership.

And that, folks, is where "free" becomes unethical.

This type of arrangement is all too common. It’s called a "negative option enrollment" or opt-out subscription. It means that the customer has to choose not to receive a service, or the assumption is that they wish to receive it. The assertion is that this is only what the customer wants, but, in truth the practice preys on people’s inattentiveness.

Here is the general formula:

1. The customer is unaware they opted-in

   Companies aren’t allowed to just take someone’s money without their permission. At some point, the customer must agree to subscribe to the service. There are many ways they can get people to do this, but they all follow a similar script: a.) the customer has to give the company access to their money; i.e. you buy something with your credit card or cash a “free” check you received in the mail; and b.) the subscription deal is spelled out somewhere in fine print, usually in confusing language. By completing transaction a.), the customer triggers agreement b.).

   

   This is a “push” page for opting-in. Everything about this design wants you to move along and not pay close attention.

   In the example above, notice how difficult it is to read the “important information” in the fine print because of the low contrast and minuscule line spacing. Eye flow on the page takes you from the salesdude, across the header text, and straight to the “Free Stuff” button– the dominant element on the page.

   The presence of the fine print means that the customer had the opportunity to become aware of the deal, but most often, because of tricky page layouts and confusing language, one often has no idea they signed up for something.

2. The service charge is obfuscated

   The company does its best to make sure no one notices the subscription. Most often, the customer has signed up for some kind of service that doesn’t appear to do anything (a discount club is a common example), so it’s not like they get a wheel of cheese every month to remind them they signed up. There is no paper bill or email for the service, either. Instead the charges show up directly on one’s credit card statement as some obscurely named holding company, so it’s hard to know where they came from. The amount of the charge is small enough—less than $20 per month—that it won’t draw much attention. The charges are designed to hide in plain sight.

   This practice is surprisingly effective. It can take people several months to discover they’ve been charged. Until then, the fees keep coming. Unfortunately, by then…

3. Stopping the service is excessively difficult

   Now the customer realizes what is going on—she wants to opt out. Well, the company isn’t going to make it easy. Besides wading through customer-service-robot navigation hell, you’ll often have to deal with a service rep that is trained to dodge all your requests (and probably, accusations) with tricky language. They’ll do their best not to lie (that would be illegal), but they will do whatever they can to keep you on the hook.

   Oftentimes, the customer will be told that they signed up for several months of a service and they can only cancel after the period has expired—so call back later. Or, they’ll be told that the service is canceled and to wait for confirmation—which mysteriously gets lost in the shuffle.

   It can be very hard to legitimately stop the subscription. Many times, the only way to opt-out is to stop the charges. No matter how you are released from your obligation, there is a good chance your money is gone for good. After all, you signed up for it.

The opt-out runaround is a potent cocktail of dodgy design and shady customer service, but it’s not like these unethical tactics are restricted to fly-by-night companies that exist only to scam you out of money. Many legitimate companies sign you up for spam if you don’t unclick certain check boxes when you get a free email address or place an order. Ever try to get out of a cell phone contract or cancel with AOL?

Next time, we’ll look at the same tactics, Goofus and Gallant style, and see how doing the right thing in these cases is not only ethical—it’s actually an opportunity.