"The rule change will require merchants to gain cardholder approval at the conclusion of the trial before they start billing", Paul Petta, Mastercard's chief franchise officer, said in a blog announcing the new compliance measure.
'And with so many merchants offering them, free trials are becoming the new norm. Under the change, assuming the consumer signs up for the trial with a Mastercard, the company will need to get permission before they bill the user.
So far the decision has been announced in the United States, however it is likely to be extended globally given Mastercard's preference for global consistency in scheme rules.More news: Millions will get a raise if House Democrats succeed
At Mastercard, we want every commerce engagement to be simple, safe and secure and we are introducing rules for merchants that offer free-trials to make this a hassle-free experience for their consumers.
It has become standard practice among online subscription businesses to tempt people to sign up with a free trial, but start automatically and regularly charging fees when that period ends if the customer didn't explicitly cancel the service.
'These situations can be frustrating and costly for both consumers and their banks.More news: Prince Philip is involved in a vehicle crash while driving
They will also have to send the cardholder an email or text telling them how much they will have to pay and when they have to pay it, along with explicit instructions on how to cancel a trial. That message has to include the subscription cost, payment date and merchant name presented clearly so you know exactly who you are dealing with. Card statements will also have to include contact information for merchants, either a website URL or the phone number of the store or service.
Such services are often offered with an initial "free" trial, after which consumers will have money taken directly from their bank account.
As consumer-friendly as these new rules are, it's worth noting that they only apply to Mastercard customers for now.More news: Rockets stunned by Nets in OT despite Harden's 58
The company added that cardholders are also covered by Mastercard's "Zero Liability" policy, which protects them against unauthorised purchases or charges.
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