Credit Auto-Renew

September 6, 2007 7:14 PM

How common and/or ethical is the practice of auto-renewing a credit card subscription payment without authorization?

I signed up for a three month subscription to a popular dating website, and expected it to lapse after that time. But no, it continued, and another charge was debited to my MasterCard. At no time did I authorize the auto-debit of my card. I phoned MasterCard to stop payment, but they said my dispute should be with the website (which I have also asked to reverse the charge). What are the ethics/legalities of this negative option practice? What is the best way to handle this?

posted by weapons-grade pandemonium to Work & Money (18 answers total)

I'm no Randy Cohen here, but I'd say that ethically this is ok for them to do. As long as they inform you up front of what their auto-renew policy is, which I'll be they did in the fine print when you signed up, they're off the hook. Their only ethical obligation was to inform you of this, which they did, so it's up to you to read the fine print.

Now, if they auto-renewed and you can PROVE that they never informed you that they would, I'll be the Better Business Bureau would be interested in hearing about your dilemma.
posted by jk252b at 7:28 PM on September 6, 2007

This is very common and it is the business model for many companies. You basically get an annuity from people who are too lazy to cancel their subscription but aren't using any of your resources.

See, for example, this description of the business model for a cookie cutter porn site (NSFW, obviously). You get 100 people to pay $12/month for a website they've totally forgotten about, and it's a pretty nice annuity.

It's not a business I'd want to be in, but I wouldn't call it unethical. It's certainly not uncommon.

(Note: politicians and charities do the same thing, getting you to sign up for recurring monthly donations.)
posted by alms at 7:37 PM on September 6, 2007

This is pretty standard practice in the subscription industry (magazines, hosting providers, Time Life Music collections, Girls Gone Wild, etc.) and has been for some time. This is why many companies offer additional incentives if you buy something with a credit card, so that they can continue to send you other items "you may be interested in, at no risk to you."

It's not cool. Very very not cool. But not illegal, and depending on what side of the transaction you're on, not necessarily unethical. Most companies defend this practice by saying it is more "convenient" to auto-renew for you, rather than force you to remember to make another payment and sign up again. Utter bull. But so long as they have something in their Terms of Service to inform you that this will happen (in very fine print), there's not much you can do but be careful.
posted by krippledkonscious at 7:40 PM on September 6, 2007

It's a common practice for many businesses, not just dating web sites. I used to work for a catalog company which sold (among other things) nutritional supplements and PowerBars on this sort of arrangement. It's only a half-step away from the old record-club and book-club arrangements, where you sign up and they keep on sending you crap unless you tell them not to.

As far as the ethics go, I agree with jk252b that it depends on the disclosure up-front. Some of these dating/etc web sites could do a bit more to make their disclosures clear. Some of the gay ones I've used are, in fact, quite clear, even offering you a menu of auto-renew or one-time only payment options when you sign up.

As for the best way to handle it, yes, check the disclosures and TOS. You say you've already contacted the web site and ask them about refunding the charge. Was this by email or by phone or in writing? Phone is probably better than email. If the auto-renewal was not actually in the disclosures and TOS, write a letter and include a copy showing where they misled you. I would also "cc" the letter to some authority -- maybe your state attorney general's office?
posted by Robert Angelo at 7:41 PM on September 6, 2007

Not to mention phone companies, ISPs, etc. I can only think of one subscription-based service off the top of my head that doesn't auto-renew or go month to month with automatic charges "for your convenience".

I don't think you have much of a case, sorry, and like your credit card said your best option is probably to dispute it directly with the site and hope they cave and give you some of your money back (good luck).
posted by anaelith at 8:06 PM on September 6, 2007

Check the terms that you agreed to when you signed up (or the current terms for new sign-ups if you didn't save a copy). If there is mention of auto-renewal, cancel and let it go.

However if there was no mention of auto-renewal, then you did not authorize the charge and you should dispute the charge with your credit card company. You don't have to convince the dating site to do anything, just wield your power as a cardholder. Tell your credit card company that the dating site made an unauthorized charge to your card and you would like the charge reversed. They will issue a charge-back and you will get your money back (so long as the dating site can't provide proof of your authorization of the charge).
posted by reeddavid at 8:08 PM on September 6, 2007

the way you avoid this is with one of those one-time-only, pre-loaded visas or mastercards. i'm willing to pay a nominal extra service fee for it to avoid the hassle of these sonsabitches trying to leech off my regular card.
posted by bruce at 8:14 PM on September 6, 2007

I think it is sleazy, but very common. In a related vein, Consumer Reports, of all businesses, didn't do me the courtesy of letting me know I should switch to an annual web subscription (I was stupidly on month to month for a couple of years) and when I noticed it myself they made it nearly impossible to swith my subscrition term, so I cancelled all together.
posted by Good Brain at 8:14 PM on September 6, 2007

Ethical? No. I take issue with the idea that something is ethical if it is "in a contract" or "common." Ethics is about treating others the way we want to be treated in turn. I don't _want_ to be continuously leeched of funds without authorization, so it is categorically unethical for me to do the same to you.

Legal? Yes, it is perfectly legal. If it is in a contract and not otherwise forbidden by law, it is legal.
posted by TeatimeGrommit at 8:21 PM on September 6, 2007

I think the ethics depend on how they informed you. In the poster's case, it obviously wasn't communicated that it's a recurring subscription. Others are right in your face obvious, with the company relying on you being lazy. Think book clubs that are "Get 12 books and 10 dollars for signing up, then a new book every month for $20!". They are very up front about the recurring charge, and I have no problem with that at all. The hidden recurring charge is gimmicky and sleazy though.
posted by cschneid at 8:49 PM on September 6, 2007

In many cases, you'll have difficulty getting in touch with anyone who can remove the charge from your card. Emails can be ignored, call the 800 number, you'll probably spend most of your time on hold. These companies rely on you getting frustrated and deciding it's easier to pay the charge than to persue the matter. You need to be aggressive. Google the name of the dating service, and find out the name of the parent company. Go to Hoovers.com and get the company's vital information (street address, list of main executives). Then compose a succinct letter explaining the details of your account, that you did not authorize these continued charges, want them reversed, etc. Send it via snail mail (certified if you want proof of delivery). In cases like this, very rarely will actual paper correspondence be ignored. I've always had an excellent success rate when approaching similar problems in this manner. Best of luck.
posted by Oriole Adams at 9:39 PM on September 6, 2007

I just got auto-renewed for magazine subscriptions (which I found to be over the price I would pay if I filled out one of those subscription cards in the mag) and for classmates.com. I called the credit card company to get a phone number for the magazine reseller and to outright refute the classmates.com renewal. Who cares if I signed up for it a year or several years ago -- I don't want it now, so I have the CC company deal with the vendor.

I suppose it's out of convenience to auto-renew, but I certainly would like some kind of notification beyond a coded entry on my credit card statement!
posted by indigo4963 at 6:03 AM on September 7, 2007

Good answers, all. Thanks. Oriole Adams makes a good point about targeting the boss, and paper correspondence rarely being ignored.
posted by weapons-grade pandemonium at 6:23 AM on September 7, 2007

It seems more and more come. A chain bookstore that I worked at had a membership card offer where, if the customer didn't check a very small box at the bottom of the form and paid with a credit card, their membership card would be automatically renewed. As an employee, I went out of my way (and against policy) to point out the auto-renew aspect.
posted by drezdn at 6:45 AM on September 7, 2007

come= common.
posted by drezdn at 6:46 AM on September 7, 2007

Sounds exactly like my Match.com experience. If you're having trouble with them, the aggravation and annoyance of dealing with them wasn't worth it for me. After trying for days to get through with them, yelling at the customer service folks and generally hating them, I gave up because the $70 or whatever it was wasn't worth it to me. I know that's they're strategy but I caved. They totally suck and won't address any emails you send them or complaints you file. It even took me months to get them to stop sending me email about everything I was "missing" as a non-subscriber. I HATE them.
posted by otherwordlyglow at 10:02 AM on September 7, 2007

Next time use an AMEX.

One call, 5 minutes, and my charge was removed. No forms to fill out.
posted by mphuie at 10:44 AM on September 7, 2007

Why are you so excited to do the legwork? Make one call to your credit card company and be done with it. No research, no snail mail, no arguing.
posted by reeddavid at 2:56 PM on September 7, 2007