FREE

Special

PRE-PAID

for Consumers

Magazine

Subscription

Scams

FTC FACTS

TELEMARKETING

1-877-FTC-HELP

FEDERAL TRADE COMMISSION FOR THE CONSUMER

www.ftc.gov

Beware of telephone sales pitches for ìfree,î ìpre-paidî or ìspecialî

magazine subscription deals. An impulse purchase could leave you with years of

monthly payments for magazines you may not want or could buy for less elsewhere. Whatís more, in some states, youíre legally obligated to pay for a

subscription once you verbally agree to it.

Of course, thousands of consumers buy magazine subscriptions from

legitimate telemarketers every year. Yet, according to the Federal Trade Commission (FTC), some unscrupulous salespeople trick consumers into paying

hundreds of dollars for multi-year subscriptions.

Sales techniques vary. The FTC says consumers should question

approaches that feature:

ï Salespeople who encourage you to buy without giving you your total costs.

For example, a salesperson may offer magazines for just a few dollars a

week. That could sound like a bargain ó until you do the math. You could

end up paying hundreds of dollars over several years for subscriptions that

sell elsewhere for less.

ï Salespeople who tell you magazines are ìfreeî or ìpre-paidî for you and

that youíll be charged only a ìprocessing fee.î The fee may be more than

the retail price of the magazine subscription.
Facts for Consumers

ï Salespeople who donít identify themselves

as such or who may not give you the name

of their company. They may lead you to

believe they represent magazine publishers,

or that theyíre calling for reasons other than

selling subscriptions.

If Youíre Called

Be skeptical when someone tries to sell you a

ìbargainî or offers you a ìfreeî subscription

on the phone. Ask questions. If you donít get

answers that theyíre willing to back up in

writing, consider doing business elsewhere.

Ask:

ï How long does the subscription last ó one

year, two, more?

ï How will I be billed? Will you debit my

checking account or credit card? When ó

monthly, annually?

ï How many magazines will I get and when

ó monthly, bi-monthly, quarterly?

ï Whatís the total yearly cost of each magazine? Whatís the total package price?

ï What are my cancellation rights? Get them

in writing before you agree to buy. The

salesperson may not be required to tell you

about the companyís cancellation policy

unless you ask.

ï Compare the costs theyíre quoting to regular magazine subscription rates.

Be careful what you say on the phone to

the seller. In some states, your verbal agreement to buy obligates you to pay. Frequently,

the salesperson tape records the conversation,

perhaps claiming itís for your protection.

Later, the company may use the tape to

ìproveî you agreed to buy the magazines,

selected a payment method, and understood the

terms of the agreement.

If you donít want a subscription, and you

donít want to be called again, tell the caller to

put you on the companyís ìdo not call list.î If

the company calls again, hang up. Itís breaking

the law. Report it to your state Attorney General and the FTC.

The Telemarketing Sales Rule

The FTCís Telemarketing Sales Rule requires

telemarketers to make certain disclosures and

prohibits them from lying. It gives you the

power to stop telemarketing calls you donít

want and gives state law enforcement officers

the authority to prosecute fraudulent

telemarketers who operate across state lines.

Some tips to keep in mind when you get a

telephone sales pitch for magazine subscriptions:

ï The caller must promptly identify the seller

and the purpose of the call. If the offer

includes the promise of prizes or gifts, the

sales pitch for the magazines must come

first. If it doesnít, hang up. The caller is

breaking the law.

ï If you ordered magazines over the phone

once, you may be called again. Although

you may think the call is about customer

satisfaction, chances are itís about renewals

and additional subscriptions. Listen carefully to the offers to make sure you understand the terms.

ï You may be called to renew your subscription, but the caller may not represent the

publisher. Before you agree to renew,

check the expiration date to determine how

close it is. Itís usually on the mailing label.

Or, you may want to call the publisher to

verify the expiration date and to confirm

that the caller is authorized to renew your

subscription.

ï Ask for a written copy of the contract

before you agree to buy any subscription.

Read it. Make sure you understand what

youíll get, the cost of each magazine and

each subscription, and the cost of the entire

package.

ï Keep information about your bank accounts

and credit cards to yourself ó unless you

know who youíre dealing with. You may

get a letter or postcard soliciting your

business, or telling you that youíve won a

prize or a contest. Often, this is a front for
Facts for Consumers

a scam. Instructions tell you to respond to a

promoter with certain information. If you

give your bank account or credit card

number over the phone to a stranger for

ìqualification,î ìverificationî or ìcomputer purposes,î it may be used to debit

your account without your permission.

Canceling Subscriptions

There is no federal law that regulates the

cancellation of telephone agreements. Though

there are certain state and local laws that

require telemarketers to provide a cancellation

period, donít agree to buy on the assumption

that you can cancel later.

If your state or locality requires a cancellation period, and you want to cancel a subscription you bought on the phone, follow these

instructions:

ï Watch your mail for the sales agreement; it

may come in a plain or ìjunk mailî type

envelope. Look for the cancellation terms;

cancellation may be allowed only within

three days of your receipt of the agreement.

The cancellation notice may be hard to find.

It could be attached to an inside page of

multiple copies of the sales agreement.

ï Sign the cancellation notice and return it to

the proper address. That may be hard to

find too, because several addresses may be

listed. Keep a copy of the signed cancellation notice for your records. Send the

original notice by certified or registered

mail, so you have proof of your mailing

date.

ï If you donít receive a written notice of your

cancellation right, write your own cancellation notice and mail it to the seller within

the required timeframe. Magazine subscription companies usually donít honor verbal

cancellations.

ï When you send the cancellation notice,

contact your bank or credit card company to

stop any unauthorized payments from your

account or to dispute any charges or debits

to your account.

ï The company may tell you that your cancellation request was too late and that you

must pay. Check with your state Attorney

General to find out what cancellation rights

you may have under state law.

ï If the cancellation period has expired and

you paid in full, the company may not be

required to refund your money. But if you

donít make the appropriate payments on

time, you could face dunning notices and

calls from collection agencies, threats of

legal action, or a bad credit rating.

Not Just by Phone: Other

Questionable Sales Approaches

While many unscrupulous subscription sellers

rely on the phone to make their pitch, some do

business in other ways. For example:

ï Door-to-door sales: Beware of emotional

appeals by someone selling door-to-door.

For example, the student selling magazine

subscriptions using the appeal that your sale

will help him/her get a college scholarship

or other such rewards. If you buy from a

door-to-door salesperson in your home, and

the purchase is more than $25, youíre

protected under the FTCís Cooling-Off

Rule. The Rule gives you three days to

cancel your order and receive a full refund.

The seller must tell you that you have a

right to cancel, and give you a summary of

your cancellation rights and two copies of

the cancellation form. Ask to see the required cancellation notice before you agree

to buy. If the salesperson doesnít have it,

donít place an order. The company is

breaking the law.

ï Postcards in the mail: The postcards say

nothing about magazine subscriptions but

direct you to call a telephone number about

a contest, prize or sweepstakes entry. If you

call, you may get information about prizes,

gifts or other awards ó but more than

likely, youíll get a sales pitch for magazine

subscriptions. According to the law, you

never have to buy anything or pay to claim

a prize, gift or award.
Federal Trade Commission

Bureau of Consumer Protection

Office of Consumer and Business Education

November 2000

F C EDERAL RADE OMMISSION T FTC OR HE ONSUMER

1-877-FTC-HELP www.ftc.gov

Facts for Consumers

ï Phony invoices or renewal notices: The

notices come in your mail and look like

bills. If you already subscribe to the magazine, check the subscription expiration date.

Also check the notice carefully to see if it

came from your publisher. If youíre not a

subscriber and you didnít order any magazines, youíre not obligated to pay.

Where To Go For Help

If you think youíve been involved in a

magazine subscription scam, contact your state

Attorney General or local consumer protection

office. Theyíre listed in the Blue Pages of your

telephone directory.

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, call toll-free,

1-877-FTC-HELP (1-877-382-4357), or use the

complaint form at www.ftc.gov. 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.