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CONTINUITY PLANS:

hey’re on TV, in print and on the Internet: Ads for “clubs” that

automatically send you a product or service — like flowers,

books, movies or software. If you join one of these “continuity”

plans, you’re agreeing to receive merchandise or services automatically at

regular intervals (often monthly), without advance notice, until you cancel.

HOW CONTINUITY PLANS WORK

Often, you can join a plan simply by accepting an introductory offer of merchandise or services. Continuity plans may offer an introductory “free trial

period” to let you check out the merchandise or service and decide whether to

join the plan. If you keep the merchandise beyond the free trial period or fail to

cancel the service within the free trial period, not only must you pay, you

automatically become a plan member.

Joining a continuity plan means you agree to the plan’s sales method as long as

you’re a member. You’ll automatically get periodic shipments of merchandise

or delivery of services. You won’t get any announcements or rejection forms

before each shipment or service period. The shipments or services continue until

you cancel your membership.

Some continuity plans give you an “approval” period. That way, you can check

out the merchandise and decide whether to keep it and pay for it. Many programs selling collectibles, like stamps or coins, work this way. Other continuity

plans require you to pay for merchandise when you receive it.

TERMS AND CONDITIONS

Sellers must give you information about the plan’s terms and conditions, clearly

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Facts for Consumers

and conspicuously, in their promotional materials. These terms may include:

• that you become a member if you accept the

introductory merchandise or initial round of

services — unless you cancel;

• that periodic delivery of merchandise or

services will occur — with no further action

on your part;

• a description of the merchandise or services

you agree to buy;

• whether there’s a minimum purchase;

• how often you’ll receive the products or

services;

• an explanation of the plan’s billing procedure for each shipment or period of service.

• how much time you have to review “on

approval” merchandise before you have to

pay;

• the terms of the plan’s refund or return

policy;

• how and when you can cancel your membership; and

• the price of the goods or services if you fail

to cancel, including shipping and handling,

if applicable.

Usually a plan will use the same billing method

for future shipments that it used for the introductory merchandise or service period. For

example, if the plan sent you a bill for the

introductory merchandise, you will likely get

bills each time you get another shipment. If you

used a credit or debit card to buy the introductory merchandise, however, the plan may seek

your consent, at the time you enroll, to charge

that card automatically for all future shipments.

PROTECT YOURSELF

Continuity plans are promoted in newspapers,

magazines, TV and radio commercials, direct

mail, and over the telephone and the Internet.

Before you agree to any plan:

• Read the terms and conditions of the

plan carefully so you understand the obligations of membership before you join.

• Keep copies of plan documentation that

explain the terms and conditions of the

plan. Some plans may send you this information with the introductory shipment.

• If an offer is made over the phone, listen

carefully and, if you don’t understand the

terms, ask the seller to repeat them. Write

down important information, such as the

customer service telephone number or

address. Don’t give in to high-pressure

sales tactics; if you don’t want the offer,

feel comfortable hanging up.

• Check out the seller. Contact your local

consumer protection agency or the Better

Business Bureau to find out if they have any

complaints on file. A record of complaints

may indicate questionable practices, but a

lack of complaints doesn’t necessarily mean

that the seller doesn’t have problems.

Unscrupulous businesses or business people

often change names and locations to hide

complaint histories.

WHERE TO COMPLAIN

If you have a problem with your plan, try to

resolve it with the seller first. If you’re dissatisfied with the response, contact your local Better

Business Bureau or local consumer protection

agency.

You also may file a complaint with the FTC.

The FTC works for the consumer to prevent

fraudulent, deceptive and unfair business

practices in the marketplace and to provide

information to help consumers spot, stop and

avoid them. To file a complaint or to get free

information on consumer issues, visit

www.ftc.gov or call toll-free, 1-877-FTCHELP (1-877-382-4357); TTY: 1-866-653-

4261. The FTC enters Internet, telemarketing,

identity theft and other fraud-related complaints

into Consumer Sentinel, a secure, online database available to hundreds of civil and criminal

law enforcement agencies in the U.S. and

abroad.