Free trials can end up costing you, how to cancel an Amazon Prime free trial

A recent settlement between the Iowa attorney general and Amazon.com demonstrates why you should be careful when agreeing to free trials for products or services.

The state said Amazon offered free two-day shipping to customers who enrolled in Amazon Prime on a free-trial basis. But unless those customers canceled during the trial period, those trials converted to regular Prime memberships, which carry a $99 annual fee and have automatic renewal.  Because the 1,100 memberships went unused, the state said it was apparent that some people didn't realize they had them.

Amazon agreed to provide $122,000 in refunds and credits to Iowa consumers for unused Amazon Prime memberships. In agreeing to provide the refunds and credits, Amazon did not acknowledge wrongdoing. 

Find out why if it says 'free' it could really be just a bad deal.

What to do

• Before agreeing to a free trial, carefully read the terms and conditions, especially if you're required to provide a credit-card number or other payment information.
• Think twice if the trial automatically converts to a paid membership if you don't cancel. If you sign up anyway, set up a cancellation reminder on your digital or traditional calendar.
• Check whether the service renews automatically. You might be able to disable auto renew.
• Also, review billing statements every monthly for unexpected charges.

—Anthony Giorgianni