Time Inc. will set aside $4.3 million for consumers as part of a settlement with 23 states over its billing practices. The publisher will also hand $200,000 to the states to cover their investigation costs.
The settlement stems from Time’s autorenew subscription activities, as well as a series of solicitations designed to look like invoices. Up to 108,000 consumers whose subscriptions were renewed between Jan. 1, 1998 and May 31, 2004 could be due refunds.
In the settlement agreement, Time maintained that it did not violate any law or engage in deceptive and misleading conduct, and that its consumer marketing practices have been lawful, and have not violated any consumer protection laws of the states. It added that its consumer marketing practices have not, and do not have, the tendency or capacity to mislead consumers.
Consumers who paid for subscriptions during the settlement period would also have had to made payment in response to the fourth billing effort or beyond. The payment would have had to be for an autorenew subscription, and the customer would have had to not renew the subscription on the same account (including autorenew).
According to the settlement agreement, Time must identify and place its automatic renewal offer terms near where the customer selects billing or subscription terms. In the case of telephone solicitations, Time will need to clearly state the autorenew terms, and obtain a clear affirmative from the subscribers. For sales made through a Web page, the terms of the autorenew must be declared before the potential subscriber hits the “submit” button.
Time is also required to send reminder notices between 30 and 60 days before the end of each subscription term, reminding the consumer of the autorenew terms, and offering a chance to cancel the subscription.
Time is also prohibited from sending out solicitations that could reasonably interpreted as a bill, invoice, or statement of account due. The publisher is also restricted from referring to a “bad debt file” “consumer credit index”, Time Inc. bad debt file” or similar terms indicating that the consumer will be reported to a credit reporting agency within its invoices. Time is permitted to refer to this if the invoice has not been paid.
The states involved with the settlement include: Alaska; California; Delaware; Florida; Hawaii; Illinois; Iowa; Maine; Maryland; Michigan; Missouri; Nevada; New Jersey; New Mexico; New York; Ohio; Oregon; Pennsylvania; Tennessee; Texas; Virginia; West Virginia; and Wisconsin.
