Negative Option Marketing

November 12, 2013 19:34 by Consumer Ed

Dear Consumer Ed:

I signed up for a free trial of an online sports subscription, and a month later I was billed for it and had to call to cancel. The same thing happened to me with a credit monitoring service.  Fortunately, I caught it on my bank statement right away, but what if I hadn't? Are businesses allowed to automatically bill you every month after the free trial period is up?

Consumer Ed Says:

The two situations you have described are examples of so-called "negative option" plans. In a negative option plan, goods or services are provided to the buyer automatically unless, like you did, the buyer tells the seller that they don't want them. More specifically, your examples are of negative option plans in the form of a free trial offer, which are very common.

The legality of this practice depends on the terms and conditions of the particular plan, and on how the seller discloses these terms and conditions to the buyer. Under the Federal Trade Commission's Negative Option Rule, which the State of Georgia has adopted, the seller must disclose the following terms to you in a clear and conspicuous manner:

  • The fact that the offer is a negative option plan
  • Minimum purchase requirements, if any
  • Cancellation Rights
  • Refusal Rights
  • Postage charges, if any

If a business doesn't comply with the Negative Option Rule, the consumer isn't obligated to pay for the products or services associated with the contract.

If you were enrolled in a negative option plan without your knowledge, and the terms and conditions of the plan were not described in a clear and conspicuous manner, you may file a complaint with the Federal Trade Commission by visiting ftc.gov or calling 1-877-FTC-HELP (1-877-382-4357); or the Governor's Office of Consumer Protection by visiting our website at www.consumer.ga.gov or calling 404-651-8600.

Consumers who believe that they weren't appropriately notified of the negative option billing should also consider consulting a private attorney to discuss their situation.

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Satellite TV Provider is Charging for Movies Never Ordered

September 12, 2013 18:58 by Consumer Ed

Dear Consumer Ed:

My satellite TV provider charged me for movies that I did not order and refuses to give me proof showing that I did order them (which they claim to have).  What are my legal rights in this situation?

Consumer Ed Says:

Satellite TV is considered a type of cable television service.  The Federal Communications Commission (FCC) and local cable franchising authorities (the city, county or other government organization responsible for regulating cable television services in your area) regulate certain aspects of the cable industry, including some rates and business practices.  However, for the most part, price and service decisions are determined by each cable company, and your right to dispute billing charges is set by your provider's complaint procedures as laid out in your service agreement.

Below are some suggestions for handling billing disputes with your satellite provider:

 

  • Contact your satellite provider first, by phone and in writing, and attempt to resolve the dispute following the company's complaint procedures.The customer service representatives at your satellite provider are your first and best line of defense, especially since rates for premium movie charges are not regulated by the government.
  • If you aren't satisfied with your satellite provider's response, or if it fails to respond, contact your local franchising authority.  The name of the franchising authority (which may be the Board of Commissioners in the county where you receive service) should be on the front or back of your TV bill.  If this information isn't on your bill, contact your satellite provider or your local town or city hall.
  • Your local franchising authority may have adopted the FCC's Customer Service Guidelines, which gives cable/satellite subscribers additional rights, such as the right to a response to a written complaint about billing matters within 30 days.  Or your franchising authority may have its own customer service or billing rules regulating local cable service providers, which may provide you with additional rights or procedures for handling billing disputes.  Some local franchising authorities have online complaint forms that you can use to complain about unresolved billing disputes and practices.
  • If you are still unable to reach an agreement with your satellite provider, you may consider contacting the Better Business Bureau to file a complaint.
  • At each step, keep clear and detailed notes about each development, including names, dates and contents of each person and communication in which you participate.

 

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Doggy Daycare Refuses to Issue Refund

August 15, 2013 18:41 by Consumer Ed

Dear Consumer Ed:

We purchased a block of 30 visits to a doggy daycare.  Tragically, our puppy had to be put down shortly after.  The owner of the doggy daycare refused to refund the balance (several hundred dollars) citing a no refunds policy. I have no other pets, am I just out the money?

Consumer Ed Says:

Georgia law doesn't require businesses to provide a refund or accept returns or exchanges, which means they can set their own return/refund policies.  These policies may offer consumers a cash refund, store credit, or exchange, or they may prohibit returns of any kind. Except in very limited circumstances, the law generally does not guarantee you the right to a refund or a three-day cancellation.
 
Even so, there are a few circumstances under which you might be entitled to a refund. Stores must honor the terms of their return policies. So if a business has a return policy that provides for refunds, and if you abided by the terms of that policy, then the store is obligated to issue you a refund.
 
Alternatively, if the doggie daycare received the benefit of your money without having to provide the services for which you paid, you may have a claim for unjust enrichment (which is another way of saying that the daycare unfairly profited at your expense). You should seek legal advice about your individual situation; if you can't afford your own lawyer, contact your local legal aid office or consider using your local magistrate court.If you believe that the daycare didn't adequately disclose the terms and conditions of its refund policies, or that those policies were otherwise unfair or deceptive, you can file a complaint with the Governor's Office of Consumer Protection at www.consumer.georgia.gov or by calling 1-800-869-1123. You can also file a complaint with the Federal Trade Commission by visiting ftc.gov or calling 1-877-FTC-HELP (1-877-382-4357).
 
The best way to protect yourself in future transactions of this kind is to inquire into a company's refund policies prior to making a purchase, and to ask for those policies in writing.

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