Brokerblogger

"Auto-Renewal" Complaints May Lead To FTC Rules - Brokerblogger

In my last post ""Automatic Renewal" - Renewal Rates & Fool's Rate Go Up", I said I would go more into why I think people can be fools if they do automatic renewals, without having the benefit of an online Virtual Credit Card Account Number as I use.  Well, I should say that their actions are foolish vs. they themselves being fools, but the truth is that in most automatic renewal situations,  people's actions are only foolish if they don't take the time to meticulously read the T.O.S. or User Agreement's "fine print".  My contention is, though, that all important information that the consumer needs to know about the automatic renewal process needs to be upfront, clearly & conspicuously disclosed in a comprehensive way, right where the consumer is filling in his contact info.

Let's see one complaint from a 17 year old that wound up being "his fault", because he didn't communicate his cancellation notice according to the terms outlined in the seller's user agreement.  He only e-mailed them back vs. using the online "Cancellation Request Form", after receiving an early notification e-mail from the domain name seller, Globat.  On this SitePoint Forum Post, "liam UK7" says "..i get a notification from paypal saying i have had about $8 taken from my account for a Domain Guard for Globat. Confused about the payment i email Globat, only to be notified that i have an outstanding bill of $118. And that they never received any cancellation.  I spend all day explaining to them that i sent the email, and that i didn't want the account and can they please close my account. They say they can close my account, but i need to pay the $118 before they will cancel my account."  He goes on to say "Today i wake up to find that $95.40 has been taken from my Paypal by Globat, i don't know how, i didn't send the payment, its done it by itself. And when i email globat i haven't received any reply."  I explained in "Is an "Automatic Renewal" a Deceptive Marketing Tool ?  how PayPal's "Buyer Complaint Policy" does NOT COVER SERVICES!

Let's see another complaint.

"Automatic Renewal" - Renewal Rates & Fool's Rate Go Up - Brokerblogger

Trust is the most important aspect for users of the Internet.  Without it, usage will still grow as broadband usage increases, but healthy growth is hampered by anything that causes distrust.  Deceptive, or even just innocent misleading, online buying processes by sellers can negatively affect trust.  Just making the consumer wade through a lengthy T.O.S. to find the important "fine print" can break trust.  So, I believe it is the seller's first responsibility to make sure that trust is never broken in any way.  Oh, and yes, it does work both ways!

That said, I've found this WebmasterWorld forum thread entitled "Improving Site Subscription Renewals" that has a 9/27/06 post by "Beagle" on the first page saying "There are some automatic renewals that I appreciate as a customer because they give me one less thing to do, but they always have two things in common: I specifically signed up for automatic renewal (it was opt-in, not opt-out), and I get an email a week or so ahead of time reminding me of the renewal and saying that unless I tell them otherwise, my account will be billed on [date] etc., so I have a chance to cancel if I want before my account is billed (which saves charge-backs and, hopefully, angry members)."

I feel that one early notice e-mail, and doing it only one week or so before the renewal date is not enough!  Because, reminder e-mails can get caught in spam filters, or never arrive, or are never read, for a variety of reasons (no matter how remote the reasons may be like a change of e-mail address).  Also, what if the consumer is taking a holiday for a week or two before the renewal date that he's forgotten about, and is not looking at his e-mails, or has put all his e-mails on "vacation hold" with an auto-responded message that the publisher's computer doesn't process properly?

Let's take a closer look at some other postings on that same thread.  Plus, if you havn't read my first post in this series, it is "Is an "Automatic Renewal" a Deceptive Marketing Tool ?"

Is an "Automatic Renewal" a Deceptive Marketing Tool ? - Brokerblogger

Sometimes, an "automatic renewal" on a publication or software's yearly subscription can be a deceptive marketing tool.  It is like the "hunting" seller has the "dear" buyer squarely in his "sites".  This is true if the seller doesn't do a clear, conspicuous, comprehensive, and completely comprehendable disclosure upfront, before the buyer signs up.  Most of the time, this disclosure is communicated in the form of "fine print" that is buried in a lengthy (very time consuming to read in detail) "terms of service". 

But, even when it is disclosed upfront in a conspicuous way, many times the complete procedure for early notification of that auto-renewal date is not given.  Plus, when the seller does give a fair number of pre-notification e-mails, the renewal date may be left out, and many times the options on the pre-notification e-mails are "renew now" or "renew later", and NOT "cancel now" or "cancel at subscription termination date".

I canceled my subscription to WebmasterWorld not because it isn't a fine publication, but because I no longer needed it as much as I used to, and their "Subscribe to WebmasterWorld" page had an automatic renewal subscription plan that did not send me any pre-notification renewal notice e-mails (that I ever received), besides never stating upfront how many times they would send those e-mails.  At least they did disclose upfront on their PayPal form above that the automatic renewal would be at the previous rates by saying:  "Note: Your subscription will automatically renew at the rates stated above unless you cancel prior to the end of the billing period."   However, on their "2CheckOut" credit card form it only says "Subscribe to WebmasterWorld for 6 months - Bills every 6 Month(s) Until Canceled".   The possibility, or not, of increased rates upon automatic renewal need to be disclosed upfront by any seller.

No consumer wants to forget his 6 month or annual renewal date on anything, and then receive a bill a month later stating that his account has been charged!  Here are some of the problems for both the buyer and the seller.