Trading Standards warning about “New iPhone for £1” trap

September 8th 2015

Amidst the rumours that Apple is to unveil its new iPhone this week,  consumers are being urged to be on the lookout for criminals flooding popular social media platforms with misleading adverts and bogus offers. The warning has been issued by the National Trading Standards eCrime Team.

For more information on how to spot and avoid subscription traps, click here.

Citizens Advice's consumer helpline has already received complaints from the public about misleading offers for the new phone. One advert in particular targets UK consumers, leading them to a clumsily mocked-up BBC News story (shown here) announcing a “flash sale” on the new phone. In reality, consumers trying to take up this offer would be entered into a prize draw with little chance of winning, and would end up unwittingly signing up to a recurring monthly payment of £74, because of stipulations buried in the small print.

This attempt to capitalise on the iPhone launch is a type of ‘subscription trap’, where consumers are enticed to make a small payment to access an offer before becoming trapped into making costly monthly payments which can be difficult to stop. Subscription traps often misuse online advertising and continuous payment authorities (CPAs) to take money from people’s accounts without their informed consent.

Steady increase

The Citizens Advice Consumer Service has seen a steady rise in complaints about subscription traps since 2012. Between 2012 and 2014 in particular, it saw a 710% rise in complaints about slimming and health supplement suppliers taking money from people’s accounts without their informed consent. In almost all cases this took place after the purchase of ‘free’ trial packs of supplements from online sellers.

In the six months leading up to October 2014, callers to the service reported losses totalling £465,000 to slimming pill ‘free trial’ scams, with each caller losing an average of £150.  

Whilst the ‘iPhone for £1’ offer differs significantly from ‘free’ trial offers normally associated with subscription traps, the National Trading Standards eCrime Team is worried the timely offer will lure many technology enthusiasts into subscription schemes.

Mike Andrews, National Coordinator for the National Trading Standards eCrime Team said: “We are worried that criminals are using social media advertising more and more, and the popular appeal of products such as iPhones and iPads could lure victims into subscription traps. We don’t want people swept up by the hype surrounding the launch of this new product to be caught out in in this way. Always be suspicious of any offer that looks extremely cheap, particularly if you see it in social media or in an advert online. And if you do get caught out by one of these offers, remember you have the right to cancel a continuous payment authority.  You can do this by getting in touch with your bank or credit card company as soon as you can and asking them to cancel the payments immediately. Make sure you do it quickly, because you may not be able to recover payments made before you become aware of them."

Mr Andrews concluded: “I would also urge people to report possible subscription traps to Citizens Advice via the consumer helpline on 03454 04 05 06 – complaints from consumers are crucial in helping enforcement teams clamp down on the criminals behind these scams.”

By Get Safe Online





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