Automatic Renewal -- What are the laws?

May 31, 2016 5:35 AM

I'm posting this for a friend who lives in NYC. She's being harassed for payment and she's not sure what to do. I'm hoping that someone with some law or business know-how will have some advice.

Here's her story:

I am an acupuncturist who was approached last May by a company called Jewish Marketing Solutions to place an advertisement in their directories for my business. I paid $700 for a year of placement in their yellow pages and for a referral service for callers in my zip code who were seeking acupuncture. Over the course of the year, I did not receive any referrals for my business.

Apparently, the contract I signed has an auto-renewal clause and the company is telling me that I owe them $700 for the coming year. (As it happens, the credit card I used last year to pay the fee is no longer active, otherwise they would have automatically charged me.) I have asked them to cancel this contract/ad, but they keep calling and harassing me. I know that their catalogue goes to print in July and, having worked as a project manager in my earlier career, I know they could easily delete my advertisement in their catalogue before it goes to print. They did not even ask me for artwork last year until mid-June. I have sent them a letter by registered mail asking to cancel this contract. However, the letter is dated 6 days after the original contract was signed one year ago.

I am concerned that they will send this to a collection agency for payment, even though I have asked them to cancel this advertisement. Am I obliged to pay since I am a few days late regarding the auto-renewal? Do I need a lawyer to send a letter to prevent any damage to my credit?

posted by swheatie to Law & Government (5 answers total)

Unclear from your post, what does the contract say is the deadline for the auto-renewal cancellation? Does it give specific instructions for cancelling? I know you sent the letter a few days "late" but did you request cancellation over the phone when they called? Did that happen prior to the deadline?
posted by magnetsphere at 6:49 AM on May 31, 2016

I wouldn't worry too much about it, TBH.

You can always dispute it with a collection agency (if it even gets that far.) They're looking for people who roll over and take it, they're not going to put a lot of resources into someone who can say, "I cancelled verbally before the renewal deadline and followed up with a letter. I am not interested in taking out any more ads in your useless publication."

You can even say to anyone who calls, "I dispute that I owe this money. Please stop calling me, this is against fair credit collection practices. In future please direct correspondence to my attorney."
posted by Ruthless Bunny at 8:38 AM on May 31, 2016

Response by poster: Just to be clear: my friend did NOT cancel before the renewal deadline. She either forgot or never knew that there was an auto-renewal, so she missed the renewal date by six days, after she became aware of it. But this is a huge chunk of money, so to just renew a year later without any reminder from them seems completely in bad faith.
posted by swheatie at 9:06 AM on May 31, 2016

IANYL. If your friend didn't receive proper notice of the impending renewal, it is possibly not enforceable under NY GOL sec. 9-503. Hopefully, they are not so committed to their shady practices as to send the account to collections--it will get much messier if they do. If they do, then your friend should consider calling the NY attorney general's Consumer Frauds and Protection helpline.
posted by praemunire at 9:30 AM on May 31, 2016 [2 favorites]

Thank you, everyone, for your help here! The company has now refused the certified letter I sent. I have followed up with a fax and an email. Another attorney told me that a letter from him may do little to stop them from sending it to a collection agency, if these are their tactics. Meanwhile, they are now telling me that they can bring the price down 50%. That seems to reflect a sign of weakness on their part, hopefully.
posted by wheeler10 at 5:13 AM on June 1, 2016