'Til Forbid

Circulation Management, June 1, 2004

Byline: RAY SCHULTZ

Every time circulators see an opportunity, something gets in the way. Take continuous service. Given the cost of renewal mailings and the sheer inconvenience to publishers and subscribers, who does not want to see this take off?

But consumerists and law enforcement officials are starting to take a dim view of the practice.

As Barbara Love has reported, for example, a Washington Post consumer writer has decided he doesn't like the idea, although the Post itself offers contininuous service. (The Circulator, May 5).

According to Barbara, Dan Oldenburg has authored two articles warning consumers about continuous renewals "Those Surprise Subscriptions" 4/5/04) and "Beware of Self-renewing subscriptions" (April 14).

Oldenburg quoted a consumer who claimed that her subs were renewed without permission. She called it "electronic pick pocketing." and he argued that consumers are unwitting victims.

Well, he's right to an extent. Swindlers, some of whom have pursued other scams before finding this one, have charged credit cards without permission for dubious membership services. They have hidden their true intent behind phone script blather, and consumers are unaware that they have signed up for anything until they receive their bills.

Even some subscription agents have sold consumers into fraudulent member services (or partnered with third parties that did the upselling). And once a person is in one of these programs, it's impossible to get out.

That is not what legitimate publishers are doing. But as with sweepstakes a few years ago, that sort of garden-variety fraud is likely to lead to regulation, and that will almost certainly hinder the legitimate use of this discipline.

Don't think that Oldenburg is a lonely voice. The Federal Trade Commission has filed several cases involving fraudulent debiting for allegedly continuous service. And officials from the FTC, Federal Deposit Insurance Co. and the office of the Controller of the currency recently met in Washington to discuss the issue.

The good news is that the purpose of that meeting may have been to gain an understanding of continuous service.

"I don't think the issue is fraud on the marketing end," said one source. "It may be confusion on the consumer end." For example, consumers may not know whether the card they use is a credit or a debit card.

What can you do in the meantime? Follow existing telemarketing rules. Make sure the subscriber clearly understands the terms of the offer, and that you have an acceptance on tape.

Circulators can only hope that any regulation that comes out of this will be nuanced and tailored to meet the needs both of consumers and businesses.

Rschultz@primediabusiness.com, (212) 462-3371

Write to us at cmedit@primediabusiness.com or P.O. Box 4235, Stamford, CT 06907-0235, or call (203) 358-4285.