Free-to-pay conversion refers to a business model where a customer initially receives a product or service at no cost for a limited time. If the customer does not cancel the service before the trial period ends, they will automatically start incurring charges for continued access. This model is commonly used in subscription services and online platforms.
This term is often relevant in consumer protection law, particularly regarding advertising and marketing practices. It is important for businesses to clearly disclose the terms of free-to-pay conversions to avoid misleading consumers. Users can manage their subscriptions and cancellations through legal templates available from resources like US Legal Forms, which provide guidance on compliance with these regulations.
Here are a couple of examples of abatement:
Example 1: A streaming service offers a 30-day free trial. If the user does not cancel their subscription within that period, they will be charged monthly fees starting on day 31.
Example 2: A software company provides a free version of its product for three months. After the trial, users must pay to continue using the software unless they cancel before the trial ends. (hypothetical example)
Examples of state differences (not exhaustive):
| State | Key Differences |
|---|---|
| California | Requires clear opt-in consent for automatic charges. |
| New York | Mandates specific cancellation procedures for subscription services. |
This is not a complete list. State laws vary, and users should consult local rules for specific guidance.
| Term | Definition | Key Differences |
|---|---|---|
| Free trial | A limited period during which a service is offered for free. | Free-to-pay conversion typically leads to automatic charges unless canceled. |
| Subscription service | A service that requires payment at regular intervals. | Free-to-pay conversion can be a type of subscription service but starts with a free period. |
If you are considering a service with a free-to-pay conversion model, make sure to:
If you forget to cancel, you will typically start incurring charges at the end of the trial period.
