CURRAN ANNOUNCES SETTLEMENT WITH TIME INC. CONCERNING AUTOMATIC RENEWAL OFFERS AND MAIL SOLICITATIONS

Maryland Attorney General J. Joseph Curran, Jr. announced today that his Consumer Protection Division, working in conjunction with a multi-state group of Attorneys General Offices, has reached a settlement with Time Inc. As a result of the settlement, Time Inc. will refund up to $4.3 million dollars to consumers, including paying Marylanders approximately $143,500 in refunds.

The settlement resulted from the States' investigation into Time's marketing and billing practices concerning automatic renewal offers, billing and collection procedures, and solicitations in the form of invoices. The States investigated complaints that Time was billing consumers or charging their credit cards for unwanted magazine subscriptions. These complaints arose when Time broke with the long-standing industry tradition of limited-term subscriptions that are renewed at the customer's option at the end of the subscription term. In its place, and without adequately informing customers of the change, Time initiated an automatic renewal method that requires the customer to cancel the subscription if a renewal is not wanted. This practice generated significant consumer confusion. The States also investigated complaints that Time mailed consumers solicitations that appeared to be invoices and lacked the conspicuous disclosures required by law. The States concluded that Time's practices misled some consumers into paying for unwanted or unordered subscriptions.

"I am glad consumers will be receiving refunds," Curran said. "Consumers should only be charged for magazines they ordered."

Time Inc. denied the States’ allegations but agreed to provide clear and conspicuous disclosures to consumers concerning all of the material terms for automatic subscription renewals. Consumers will have the opportunity to affirmatively indicate whether they want the automatic renewal option. Before the end of the subscription period, Time will send customers written reminders of the automatic renewal, their right to cancel the subscription and the procedure for cancellation. Time will honor all requests to cancel subscriptions as soon as reasonably possible. If customers are charged for magazines they did not order, Time will refund the subscription price. In addition, Time will not mail solicitations to consumers for subscriptions that resemble bills, invoices or statements of accounts due, and Time will not submit unpaid accounts of automatic renewal customers for third party collections.

Nationwide, more than 108,000 consumers who made payments for magazine subscriptions that were automatically renewed between 1998 and May of 2004 will be eligible for refunds. In Maryland, approximately 3,400 consumers may be eligible for refunds. Within the next three months, Time will be sending State-approved refund letters and claim forms directly to consumers who may be eligible. The letters will explain the settlement and contain instructions on how to apply for refunds. Consumers who are eligible for refunds will be identified from Time’s records, so there is no need for consumers to contact the Attorney General’s office to qualify for a refund. Consumers should look for an envelope from Time that says "REFUND OFFER ENCLOSED."