Mastercard Inc said on Tuesday it would buy back class A shares worth $4 billion
Mastercard is stopping merchants from sneakily turning free-trial subscriptions into paid subscriptions, requiring merchants to properly inform customers how much the service will cost and how to cancel beforehand.
It explains that its rule change will require merchants to gain cardholder approval at the conclusion of the trial before they start billing.
Merchants will be required to send the cardholder a notice either by email or text which details the transaction amount, payment date, and merchant name along with explicit instructions on how to cancel a trial.
For each subsequent payment, the merchant is required to send a receipt to the cardholder for each transaction, with clear instructions on how to cancel the service.
Also, all charges that appear on a cardholder’s statement must now include the merchant's website URL or phone number of the store where the purchase was made.
"For some consumers, a free trial is a great way to test out a new product and get comfortable with it before making a purchasing decision. However, sometimes a free trial can unwittingly turn into a recurring subscription that is difficult to cancel. These situations can be frustrating and costly for both consumers and their banks," says Mastercard, on its blog.
It says the new rules will help increase transparency and ensure an outstanding experience for cardholders.
"In addition to these changes, Mastercard cardholders are also covered by our Zero Liability policy which protects them against unauthorised purchases or charges," it says.
Mastercard adds that if its cardholder suspects that a transaction is fraudulent or unusual, the customer should contact the bank that issued their card for more information and further assistance.
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