Continuous Service? Dumb Moves from Smart Money

Oh yes, I can relate to your feelings on this matter, JD. About a year ago I was poking around a popular cooking magazine’s website and decided to sign up for two free issues that they advertised very predominantly. I expected to receive subscription requests, naturally, but I chose not to sign up.

This company sent me mail that looked and used language that exactly replicated a bill. The envelopes even said “Account Overdue” on them and I was so concerned that I emailed the customer service department to re-iterate that I only agreed to the trial issues. This scenario went on for several months and was stressful as I was never sure they had their facts straight – I didn’t want some collection agency after me and an error to fix on my credit report – for two magazines!

It was all OK and the “bills” stopped coming eventually, but I found their “fake bill” tactics so sleazy that I will never subscribe.

Excellent work, JD! Nothing will put the scare into a giant like Smart Money more than a readership revolt. Hopefully this effort will open their eyes to the effect their actions have and furthermore “keep the honest ones honest.”

As the co-founder & publisher of The Tessy & Tab Reading Club for preschooler, I was thrilled to see you call attention to bad renewal practices. While I have no problem with an opt-in auto-renewal, deceptive practices give all publishers a bad name. When we got to a high level of subscribers, publishing mentors said we should outsource the “fulfillment” (that’s mag-speak for processing new subs, renewals, changes, missed issue requests and label info). We sent our fulfullment out to one of the Big 3, and that lasted about one year. After some time, they insisted we do was a 7-effort renewal series. You know when start getting “renewed” just about half way through? We said no. Waste of paper, and annoying to our fans. They wanted to “broker” our customer lists to increase profits. We said no, we don’t share or sell data. We ended up bringing the fulfillment services back in house, and our customer referral rates literally doubled. I think that the magazine industry has some prehistoric practices that need to succumb to extinction. The stronger the trust in your relationship with subscribers, the better your business will be.

I have just skimmed the 154 comments lightly, so I don’t know if this has been mentioned already, but: I work in the magazine/newspaper business, as a designer. I don’t know much about the economics of it, but my boss has on several occasions mentioned that getting subscribers is really expensive — so expensive that we lose money the first year. And I think that is even if we sell subscriptions at full price. Only if people renew their subscriptions after the first year, we start making money from them. This is in Norway, mind you, but I can imagine that it works mostly like that in the US too.

So when you get a half price (or better?) offer like you did, my guess is that you are not generating income for them at all, and you might even be costing them money.

I realize that you want to save money, but if you want to keep a publication running, you might want to consider paying them what they tell you they really need to charge you for it.

If you shop around for goods in stores, it makes sense to buy stuff where it’s cheapest. But subscriptions work differently. Introductory offers are just that — you’re not as likely to subscribe for the first time if you have to pay full price for something you’re not sure is the right thing for you. But after you’ve tested it thoroughly for a year or so, you should have found out if it’s something you want to keep paying for at the regular rate.

I’m not saying you shouldn’t take advantage of offers that are available to you, but cancelling and resubscribing for another introductory offer to the same household is something I, personally, think is unfair to do against a publication or service you enjoy and find worth your money.

The same thing happened to me with O (Oprah) magazine. They sent me a letter saying that, per my permission (??), I would be billed for another year. Luckily I went to site and was able to cancel it without hashing through an automated phone service. The best part? When asking me why I was cancelling my service, one of the options was “Automatic Renewal Service.” But it’s disturbing that so many magazine companies are turning to this method. I hope, like many commenters here, the customers keep contacting the magazines and letting them know exactly how much they appreciate that.

Sarah #70,

That happened to me on Facebook too! It didn’t take three weeks. They charged my cell phone $9.95 within three minutes because it was a monthly charge. I was able to stop it immediately, but GRRRR!

I had the same thing happen with my newspaper and xm radio. You would think that if you did not renew your subscription they would quit sending the paper out or discontinue your service, they don’t. Instead they have the local collection agency call you and try to collect on your “overdue” bill which you did not renew because you no longer wanted it! Lousy service or should I say no service.

I went around with the newspaper since they claimed that they were sending me an everyday paper along with the Sunday paper which I never received the daily papers only the Sunday one. Try arguing the fact that the only paper that you ever received was the Sunday paper and your not paying for something that you did not get. Truly not worth it cancelled it all.

We have a business and if we treated our customers that way I would expect not to have any more customers, not to mention how can you really live with yourself knowing that you are bilking someone out of there hard earned money for something you did not deliver.

Ah..PC Magazine did the same thing to me. When I received a card informing me that my subscription would automatically be renewed, I cancelled immediately – just couldn’t get over the audacity. I consider a magazine subscription a one-time purchase – that does not give the magazine rights to charge me indefinitely.

My wife and I recently received a letter from our Home Equity Line of Credit company saying that they were terminating our HELOC. This completely upset my wife who went on a rampage against the company. She phoned and wrote letters demanding why it was terminated. They eventually gave in and said they would do a new appraisal and look into reinstating the HELOC. Needles to say within a month they wrote a letter reinstating the HELOC. Persistence pays off.

I’ve had it happen to me even though I KNOW I opted out of automatic renewal. The last time I renewed my Good Housekeeping and Oprah magazines, I noticed a little box that you had to check off if you DID’T want automatic renewal. I don’t think they even have that option anymore. They tried to auto renew me anyhow. I cancelled and just started a new subscription using my initials rather than my name.

TDAmeritrade is also driving me nuts. I signed up for the Save Yourself account last year to get the $100 bonus. No problem with that at all. Got the bonus, but then decided my life would be much easier having one less account, plus the interest rate was cruddy. Called to cancel and was told I was all set. So why do I still have .01 in my still open account?

would love for a chance to win a magazine subscription. i used to subscribe to money magazine but did a bit of cost cutting so i stopped.

Oh my god. This is the funniest post to date. I adore your righteous indignation, JD.

My story isn’t much of a story, but I totally hate how screwed up the medical care system is. Every time I go to the doctor — and I HAVE insurance — I pay 5-8 copays. Because every single thing they do — check my blood pressure, take my history, take a blood lab, process a blood lab, and every other small thing — is counted as a separate service! Since copays don’t count toward my $750 (VERY LARGE) deductible, there is no limit to these charges. This is totally bogus. A copay (“We pay together” — no, totally bullshit, it’s an *I*-pay!!) is supposed to get the user to chip in on the cost of providing their medical care. I get it, it avoids abuse, going to the doctor every time you have a hangnail. But you know what? If I pay $35 x 8 every time I see a doctor about something, that is a complete disincentive from ever seeing a doctor about anything that isn’t life-threatening. And it makes me so totally angry, because the insurance companies are making mammoth profits on this whole scam while screwing over people who are self-employed, underemployed, or have a pre-existing condition.

I was once a member of Xsport Fitness. When I decided to leave I found that the only way to cancel my membership was to write a letter to the billing office in Chicago. I canceled in late 2008, the only reason I can see for not having a better option is that people who wait till the end of the month to cancel there membership will find themselves forced into paying for one more month.

That’s why I don’t like automatic payments; it makes me nervous that somebody will pull something shady with my bank account. The convenience factor outweighs that, however, so I do it anyway.

Sorry to hear about all that crap you had to go through!

I hate when customer service fails. I love my credit union but I had a point where I had tried to cancel a check from Scottrade before it was deposited. Well my bank had actually deposited the check before Scottrade had a chance to cancel it, but I had called to warn my bank prior to my check being deposited! I was assured that no fees would be occurred to my account, however when I looked, fees had actually been assessed. I called back and the lady wanted to know the name of the teller I had spoken with. I wasn’t sure of the name, but she said she would look into the situation and get back to me. Well she never got back to me….I then opened an account with bank of america, and have transferred all of my money out of my credit union, I still keep my account active though because they have pretty good rates on loans and offer 8.9% credit.

Thanks for bring out some consumer awareness! This is the beauty of social media. These companies can’t scam us before long before it’s all over the internet

My inlaws had given me a magazine subscription for my birthday that I was already subscribed to. It didn’t get longer, I just started receiving two copies instead of one. My wife let them know and they handled well.

As someone who is in the magazine publishing business, I cringed while reading your post. So many of the magazines out there just don’t seem to get the concept of customer service… and yes, we do have these same issues at our place. It’s no wonder so many magazines are struggling these days.

I had this happen with pretty much all my magazines. I do not do the automatic subscription service (you can opt out of it if you can find the right hidden web page for it), and then I search online for the cheapest subscription, like you did.

I got screwed by chase last year. I signed up for a new checking account, went through all the hoops to qualify for a free 200 bucks, and then they said i didn’t do it right, and didnt’ give me the money. no amount of logic or screaming helped me get this money. I have one penny sitting in my account right now, just to spite them.

JD,

I wonder if there are any Customer Services managers or department heads out there reading these comments? They might want to take notes as to what NOT to do …

Very nice of you to offer the mag subscriptions, but I think I’ll pass. I almost always read a few selected money mags online, and I have your blog on my Google RSS feed. If I feel like I want to read a real paper version, or to look up a past article, I’ll go to the library.

I have yet another customer service horror story that concerns MCI. For years, my DH and I had some kind of long distance service through them which was bundled in along with our Verizon phone bill. We had both tried over the years to cancel the MCI to no avail, as we never make long distance calls on our landline phones (yes, we’re still one of those retrogrades who have them). Still, the $14.09 charge continues to show up on our Verizon phone bill as a part of the total cost we pay per month, even though we already have a long distance feature through Verizon, and even though we’ve made innumerable calls to MCI to cancel.

So, several months ago, Verizon called with one of their package deals where we would get unlimited long distance, caller ID, etc., for a certain base price. I said OK – it was a pretty significant reduction in what we had been paying. Then, going over my bill with a fine-toothed comb, I guessed correctly that we were in fact paying for the same service twice – Verizon long distance and this MCI long distance. I called Verizon to make sure – their rep was helpful in detailing what our package included and even agreed that yes, I was indeed paying twice.

That was all I needed to hear. I located not only an 800 number, but an account number for this MCI service and called them to cancel. It was a dreary experience, with the rep asking me in a semi-ominous voice if I was sure I wanted to cancel (as if the universe was going to end if I wasn’t) and that I needed to make sure I had another long distance service in place (no kidding, honey, we’re already getting it through Verizon anyway).

She finally gave me a cancellation confirmation number, which in retrospect I was glad I wrote down, as an official letter which was supposed to be sent never arrived. We did, however, get a very cryptic automated message on our answering machine about three weeks later, warning us that our MCI service would be terminated (yay, finally!) on a certain date and that we had better have another long distance plan in place beforehand, or else we would have to pay mightily through the nose per minute if we ever wanted to make a long distance call anywhere, presumably even to the next area code over, which is maybe eight miles away.

Well, the upshot of this story is that the $14.09 charge STILL shows up on the phone bill every month as a past due charge. I called Verizon back to get their take on it, and they said to just ignore it, to just pay their total charges. So that’s what I’ve been doing. What I can’t figure out is how to get that line item off my bill entirely. I have noticed that Verizon recently redesigned their bills, and the third page where the MCI charges are now do not have either an account number or an 800 number. Everything else with our phone service seems to be working fine, so I’m not concerned. In idle moments, though, I wonder when the people at Verizon billing are going to wise up enough to revise their customers’ accounts to reflect accurately what services they have and what services they’ve cancelled, unless (cynical compass in operation here) they deliberately include it as part of the total bill to see who’s dumb enough to pay it.

J.D., I’m sorry to hear of your magazine frustrations, but I’m really glad you’re taking on these companies with poor customer service.

One time I bought McAfee anti-virus software that didn’t work for my computer, but couldn’t return it to the store because I had already opened it. On the box, the company said, “Satisfaction Guaranteed Or YOUR MONEY BACK!!!!!” Hardly. After a year of trying, six customer service representatives, three supervisors and too many lies to count (“Your check is on the way.”), I gave up. As much as it hurt, I look at that $75 as a stupidity tax now. I really should have sent off for the rebate as well, but I stupidly believed the customer service reps who told me the check was on the way (and make sure to destroy the software since the money’s coming back). *Sigh*

I am NEVER buying McAfee software again.

I’ve had my share of frustration with magazine subscriptions too. Two cases:

a) Circa 12 years ago I was a teenager still without a credit card, but I had interest in subscribing to Linux Journal. I asked a coworker to use his credit card, and I’d pay him cash. He agreed, I subscribed, and all went well for 4 of 5 months. Then suddenly the magazine stopped coming. I contacted its customer service to ask what happened, and they told me my subscription had expired. I asked them how that was possible, as I had subscribed for 24 months. They told me they would check this, I only had to send them a fax of the card statement. I’d have done that if I could, but both me and my colleague whose card I used had left the company and I didn’t know how to contact him. End result: paid for 24 months subscription paid, received 5 issues, never resubscribed.

b) Another case was a one year subscription for an esoteric magazine somewhat around the same time (I was into these subjects back then, not anymore). The salesperson told me I’d receive not only the 12 monthly issues, but also the special issues released now and then (usually 4 to 6 a year), hence 16 to 18 issues total. Guess what? She lied. When I noticed I was receiving only the standard issues, not the specials, I called customer support and discovered they don’t have a special issues subscription. Needless to say, that magazine lost a reader that day.

By the way, regarding phones without human operators, here in Brazil the government approved a law requiring call centers to always offer the option to talk to an human being as the very first option in the menu, with a maximum waiting time of 1 minute, prohibition of transferring the call to other operators (the first attendant must solve the issue himself, whatever it is, including service cancellation), and the requirement that any issue be entirely solved in 5 business days tops. Failing to comply with any of these clauses results in (huge) daily fines proportional to the company size. Companies aren’t happy, but those feeling the weight of the fines are adjusting quite fast. USA should follow the example.

By the way: since I’m in Brazil, I don’t think I’m eligible in your promotion, even though you didn’t mention anything about it being US-only, unless you’re willing to risk paying twice or triple for an international subscription if perchance I’m selected. Anyway, I thought it’d be worth to participate in the conversation. Keep up the good work!

In early November, I received a letter from a cable company (Ygnition) informing me that they had purchased my cable company (Convergent Broadband). The letter stated that I would see no change in my service nor increase in my rates until at least January 2009.

When the conversion date came in mid-November, I came home to find that I no longer had working internet (my only reason for having cable). I also found that my 10 channels of free, local, network TV were no longer working.

I called about the internet, and they told me they would have it working in two days, and they would credit me for two days of service. About the TV, they said that my service had never been on the bill, and so it was not continued. I had never been billed for it because when they first set-up my internet they said those channels came free with all internet subscriptions.

The best that customer service could do was to offer free installation on the service I had previously been receiving for free, but the service would still cost $16/month.

I canceled my internet service at the end of December. I would have done this and gone with the phone company even if I hadn’t been moving into my recently purchased home.

I had a nice little surprise one day when I went to split my joint AT&T cell phone account into two separate accounts after having the service for 3 years. I was told that I would have to pay a cancellation fee for both phone lines because I still had a contract. I advised that I had the phone for over three years and initially signed up for a two year contract. Come to find out that every time we made some change on our account (like purchasing more minutes) it extended our contract expiration date! Well, I had planned on keeping AT&T, I just wanted my own account, but after learning that my contract was extended without me being told I promptly told the sales associate that I would be going with Sprint!

My story of financial frustration happened this week. It was my own financial blunder however. My husband and I recently purchased new phones for free and $10 respectively, renewing our contract with T-Mobile. Earlier this week, I was thumbing through the mail and saw an envelope from T-mobile. Assuming it was a bill, I opened it…only to find a credit card. I immediately through it in the recycling. I get multiple credit card offers daily, ugh! Then yesterday, we got another T-Mobile envelope, this time addressed to my husband. I opened it and it was a credit card, but I read it carefully this time. It was a $50 pre-paid card as a thank-you for renewing his contract with T-Mobile! Wow! I was happily surprised. Even though I’ve always been a fan of T-Mobile’s customer service, I did not expect them to give us money for getting a new phone! Then I realized I had thrown out my $50 card several days earlier. Bummer! I will pay more attention to “credit card” offers in the future.

Thanks for your site and your offer to 6 lucky readers!

Craziness! I would be incredibly frustrated and angered. It’s awesome that you “fought back” by writing this article since you couldn’t talk to anyone at Smart Money about the matter. Hopefully your article will make them reassess this ridiculous renewal process they have created.