An iPhone for $1? We read the fine print, so you don't have to
An iPhone 6 is seen at Eaton Centre in Toronto, on Friday, Sept. 19, 2014. (Hannah Yoon / THE CANADIAN PRESS)
If you've recently come across an offer online, advertising a chance to get a brand new iPhone for just $1, you may have wondered: Is this too good to be true?
CTV News has looked at the fine print, so you don't have to.
Perhaps you've seen one of the ads in your Facebook news feed. They might have headlines pronouncing a "shocking deal… you won't believe," for example, that tempt you with a chance to have the latest model for just $1. When you click through, you might even have seen the Apple logo associated with the offer. But you'd have to carefully read beyond the headlines about a $1 giveaway, to notice that it's not being sold at that price. Instead, if you want to snag a new phone for cheap, you'll have to become trial members of Funkyclock.com, at a cost of $1.
And when you sign up, and don't scrutinize the fine print, you could unwittingly end up on the hook for a lot more money.
Here are a few key points gleaned from the website's terms and conditions that you'd have to agree to, in order to sign up:
- The $1 is not a fee to receive a new phone, but rather the price of a trial membership to Funkyclock.com that entitles you to a chance at winning prizes
- Trial memberships are automatically renewed as ongoing subscriptions when the initial trial period ends, unless you go through the process of cancelling before then, by following the correct procedure in accordance with the site's conditions.
- Those who do sign up can immediately start to play games on the Funkyclock.com website that give winners the chance to get an iPhone or other device. But if you win a prize, you can only collect it if you continue your membership for at least one month beyond the trial period.
- Members are charged an ongoing monthly fee of $129 a month once the trial period expires and the ongoing membership begins.
Of course, the company reserves the right to change its conditions at any time.
Daniel Williams, an expert with the Canadian Anti-Fraud Centre, told CTVNews.ca that the agency has received several reports from consumers concerning Funkyclock.com.
He said that, generally, consumers should be on alert whenever they're asked to provide a credit card to enter a contest or receive a promotional offer.
Typically, he explained, the initial nominal fee you're asked to pay is "just the tip of the iceberg."
"If you don't look carefully, there's usually terms and conditions tucked away somewhere that state that, by entering your credit card number, you're agreeing to some membership plan or some type of service, which will result in ongoing charges."
Williams said most consumers who sign up for these types of deals ultimately feel that they've been cheated.
"They feel defrauded, they feel deceived. They demand their money back, and they want nothing to do with companies that do business like this," he said.
He suggests that consumers who believe they've been defrauded by a company online file a report with the Canadian Anti-Fraud Centre.
They should also promptly dispute the charges with their credit card company, as many card issuers offer support for consumers in these types of situations, Williams said.
And if the consumer believes that the fraud was a criminal act, they should file a report with the police, he said.
To avoid falling victim to these kinds of monthly-payment schemes, Williams said consumers should avoid offers that only accept credit card payments.
"If the company is insisting on a credit card, what they're telling you, without saying out in the open, is 'We plan on charging you more,'" he said.
Funkyclock.com did not respond to CTVNews.ca's requests for comment. An Apple spokesperson told CTVNews.ca that the company is not associated with Funkyclock.com.