After posting "'Auto-Renewal' Complaints May Lead To FTC Rules", I read a 1/29/07 Direct Marketing News article entitled "FTC makes negative option marketing a priority". This is great news as it says: "Ms. Parnes (Lydia Parnes, FTC’s director of the Bureau of Consumer Protection) said there is risk with negative option marketing, such as when a marketer fails to do the following: disclose or adequately disclose the material terms of the offer; secure express informed consent to the offer; and/or provide adequate cancellation procedures." My solution centers on "secure express informed consent to the offer". This is key for "auto-renewal" of all online subscriptions, in my opinion. However, legal proof of "consent" should be obtained at each renewal date, rather than only once at the beginning of the offer.
Therefore, I strongly suggest that multiple renewal notices be sent with an option to "cancel", and a "Return Receipt" e-mail function be used in all online renewal notices! Since there are usually three options open to responding to these type of e-mails, the FTC should make it mandatory that the seller receive back a written confirmation of the buyer's response through a "now" or "later" return receipt option from the buyer. If the buyer chooses "never", then the seller can't assume "informed consent".
The FTC is now giving proper attention to "Negative Option Marketing", as the article goes on to say here.
That article goes on to say: "The FTC has taken a number of enforcement actions over the years, including an action announced on the day of the workshop, where the agency attacked companies that have failed in one or more of the areas just outlined." It even now is including in the overall definition of "Negative Option Marketing" the use of this tactic in online subscriptions. But, this article only mentions the kind of online subscriptions that have a "free trial" offer. I feel that all online subscriptions with auto-renewal should be covered by FTC guidelines.
Let's hope that the FTC maintains its interest in "Negative Option Marketing", because "AS LIVES HAVE BECOME BUSIER" for all buyers, trying to keep up with former commitments made 6 months to a year ago, are harder to remember and follow up on. Let's keep the responsibility to renew the buyer with the seller through continual legal buyer consent given back to the seller at renewal time, rather than putting the final responsibility on the buyer to notify the seller that he/she wants to cancel!
I just submitted my comment to the FTC based on this FTC news release "FTC To Hold Public Workshop on Negative Option Marketing". I'm hoping that Lydia Parnes get a chance to read my suggestion (and acts on it). If you would like to submit a comment to the FTC by 2/26/07, here is the "Negative Options Marketing" FTC "Comment Form".
2/13/07 Afterthought = Here is a list of complaints about auto-renewals:
1. "Web hosting headaches" - 2/13/07
2. "Sneaky Symantec " - 2/11/07
3. "Jane Doe's Musings" - 2/3/07 - "Then, I was rather irritated to find out that my Classmates.com membership was set on automatic renewal so they renewed my account and took the money out of my checking account without me realizing it until it was too late. That really pissed me off, but there isn't much I can do about it now."
4. "Auto-Renewal & Customer Service " - 1/28/07 - "Many telcos have auto-renewal built in to each contract. (Remember to ask for the auto-renewal waiver form with every contract)."
5. "A Classmates.com Warning!" - 2/24/07 - "I do not recall choosing this option when I signed up for Gold Membeship last year. Today was my renewal day and I was charged for another year. I would like my money refunded and my gold membership cancelled for this year as I do not use it and don't appreciate being automatically billed for this."
6. "GoDaddy vs. Yahoo Domains" - 2/27/07 - "As I recall, for this (auto-renewal) not to happen Yahoo! requires that you cancel a domain before it renews. They absolutely positively will not refund a renewed domain. To get to the cancel process I think required about 4 screens with the “cancel” link kind of hidden alongside other navigation. (Perhaps it’s been updated since then.)"
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