Attorneys General from Iowa and 23 other states have forced media giant Time, Incorporated, to change the way it handles some marketing and billing practices.
Bob Brammer, a spokesman for Iowa’s attorney general, says at issue was how Time handled the renewal of magazine subscriptions. Brammer says consumer advocates charged that some of Time’s magazine sales practices violated consumer fraud laws. For one, he says they quietly initiated a new way of renewing subscriptions, and Brammer points out Time has “dozens and dozens of magazines that everybody in the country reads.” In addition to Time, the company publishes Sports Illustrated, Entertainment Weekly, Fortune, Money and People magazines.
Brammer says Time started automatically renewing subscriptions, whether subscribers wanted to do that or not. “It was kind of slipped in to people’s contracts,” Bammer says. Then, the clients who hadn’t wanted to renew found themselves the target of heavy-handed collection tactics. The two-dozen states got Time to agree to several changes. They’re going to have to specifically give consumers a chance to indicate whether they want automatic renewal or not. Some may want it, and that’s OK, Brammer points out, “but they have to have a choice, and they have to know what’s going on.”
Time must honor any request to cancel a subscription, and it must not mail ads that look like a bill which could trick some people into paying, thinking it’s a bill instead of just a solicitation.
Time will also refund $4.3 million to more than 108,000 customers who paid for subscriptions that were automatically renewed between 1998 and 2004. In Iowa, 1500 customers will be in line for refunds totaling more than $61,000. You don’t have to apply, the agreement says Time will send forms in an envelope marked “Refund Offer Enclosed.”
The attorney general’s office also announced today (Tuesday) that a contractor in Dubuque’s agreed to pay $5000 for failing to contact “Iowa One Call” before digging a basement. Erlich Concrete Construction broke a water main in the town of Asbury, cutting off drinking water to 500 customers.