This month’s Fraud Alert is similar to last month’s column when I wrote about assumed Automatic Renewals for various types of memberships and service organizations – buying clubs, lawn services, etc. This month, I am covering two other similar types of renewals: 1) those associated with magazines; and 2) those with free or discounted trial periods for goods and services.
Magazine subscription renewals are most deleterious with respect to older people. It is not unusual for people, especially the elderly, to have multiple subscription renewals good for the next 10 to 15 years. Here is what happens. It seems that once a person signs up for a magazine subscription, it is not long before the magazine company begins sending renewal notices with “special” discount offers IF the person renews now with the frequent caveat, “Send no money now.” A check of the subscription expiration date, usually contained within the address label on the front of the magazine, will show that the subscription does not expire for two to three years. What happens is that the reader does not want to lose his or her subscription and also wants to get in on the “really good” renewal offer, and therefore responds to the offer. This cycle continues over time until the reader, particularly the elderly, has multiple renewals that will not expire for many years to come.
I am aware of too many cases personally whereby this has occurred, very often with adults that otherwise function very well and still maintain their own finances. Too frequently, however, when the finances of an older person are finally taken over by one of the older children or guardian, those taking over the financial administration discover the situation and then have to go through the egregious process of canceling many of those renewals.
On the more humorous side, it is not always the elderly that get caught up in this. When my sister went to work in the accounting department of a major news organization, she discovered that they had many excessive renewals. Evidently, up to that time, whenever a magazine subscription renewal notice came into the office, accounting just paid it without checking the expiration date. When my sister went to work there, she discovered the many subscriptions, including duplicate ones, whose expiration dates were many years away.
While what happens in major companies is not typically your problem, I do encourage you to check the subscription expiration dates of various magazines your elderly loved-ones are receiving to be certain they are reasonable. It may not truly be fraud, but it is a “gotcha” that can cause people to be paying upfront for services they may never receive.
The other shady, though not truly fraudulent, practice I will cover this month, is the practice of offering a subscription product or service either free or at a very reduced price for so many months.
A popular financial software package has been offering me an updated version of the software for as much as 50% off. However, the fine print notes that the 50% is only on the first-year subscription. It used to be that one would buy the software and then own it indefinitely. But it is only when one reads the fine print, that one realizes that he is no longer buying the software, but is merely “renting” it; the company then tells the subscriber that next year and beyond, his credit card will be charged the full annual subscription amount. As an aside, consider also in this case that you no longer own your financial data, it is now owned by the financial software company while it is retained “in the cloud.”
More and more, I receive offers for goods and/or services (from medical supplies to food products to newspaper subscriptions to who knows what), that if I were to accept their “free” or “highly reduced” upfront offer, it would commit me to an ongoing monthly or annual fee at some point in the future “unless I cancel the service.” I immediately decline any such offers because it is too easy to forget the date by which one needs to cancel the service and then it is even more difficult to stop the company from charging one’s credit card each month. Yes, some companies are more reputable than others and will refund your money charged to date along with cancelling your plan, but that is not always the case. I even had one company from whom I purchased discount printer cartridges; several months later, another set of cartridges showed up at my doorstep with a bill for the additional cartridges. It turns out that I had inadvertently, supposedly, gotten the discount price because I had signed up for automatic renewals. I missed that one. That company still calls me from time-to-time trying to get me to purchase some of their discounted cartridges.
Certainly, people of all ages can fall for these unscrupulous schemes but unfortunately they are more like to ply on the elderly, particularly those whose mental faculties have begun to deteriorate. I respectfully suggest that if you have elderly parents or other loved-ones, you periodically, but politely, check such issues while being cautious that you do not fall for the same schemes.