Is using the word Free Trail on continuity programs legal. I mean as long as we are clearly disclosing the terms on ordering and when they will be billed if they don't cancel?
You are actually combining two different concepts when you use a Free Offer with a continuity program (called a Negative Option Offer by the FTC). I have tried to define how the FTC regulates both of these concepts below: “Free†Offers – The FTC has long regulated “Free Offer†advertising and has promulgated the following rules: 1. Free means free. Any limitations must be disclosed within the offer and in close conjunction to the word “free†(i.e. a shipping charge.) 2. If it is a combination (i.e. buy one get one free) the original purchase price cannot be raised so that the seller recoups more than the original price of one item. 3. “Free Introductory Offers†must mean you actually intend to sell the product, and the ad can run for no more than 6 months in any 12 month period for which you are selling the products. 4. Synonyms for “Free†are also covered (i.e. gift, bonus, etc.) Negative Option Offers The Negative Option Rule applies to sellers of subscription plans who ship merchandise like books or compact discs to consumers who have agreed in advance to become subscribers. The Rule requires ads to clearly and conspicuously disclose material information about the terms of the plan. Further, once consumers agree to enroll, the company must notify them before shipping to allow them to decline the merchandise. Even if an automatic shipment or continuity program doesn't fall within the specifics of the Rule, companies should be careful to clearly disclose the terms and conditions of the plan before billing consumers or charging their credit cards. Finally, your question was can you use them together as long as you clearly disclosing the terms? My answer is yes, as long as clear disclosing includes the concept of CONSPICUOUSLY DISPLAYED. Clearly disclosing the terms and then burrying them deep within a TOS won't cut it. Courts demand that these kinds of terms be conspicuously displayed alongside the offer.