March 21, 2006
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
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."