Attorney General Hardy Myers today filed an $8.8 million settlement agreement with Time Inc. and its subsidiaries resulting in more than 2,000 Oregonians being eligible for $80,000 in restitution and the Oregon Department of Justice to be paid for the costs and fees of investigating the company. Named in an Assurance of Voluntary Compliance (AVC) filed today in Marion County Circuit Court are Time Inc. of New York and its wholly-owned United States subsidiaries, including Time Inc. Home Entertainment, Entertainment Weekly Inc., Time Publishing Ventures, Inc. Time Consumer Marketing, Inc. and Time Customer Service. The AVC admits no violations of law.
"The Oregon Department of Justice has little tolerance for businesses that mislead their customers through cleverly-written marketing packages in order to increase revenues," Myers said. "Charging consumers unfairly for products they do not want will almost always result in a court action from our office."
Oregon and 22 other Attorneys General investigated Time's marketing and billing practices concerning automatic renewal offers, billing and collection procedures, and solicitations in the form of invoices. Investigators reviewed consumer complaints alleging 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 and numerous complaints from Oregonians and other customers throughout the United States.
Customers also complained of receiving solicitations that appeared to be invoices and lacked the conspicuous disclosures required by law. The Attorneys General concluded that Time's practices misled some consumers into paying for unwanted or unordered subscriptions.
Under the settlement, Time Inc. agreed to provide clear and conspicuous disclosures to consumers concerning all of the material terms for automatic subscription renewals. For the next five years, consumers will have the opportunity to affirmatively indicate whether they want the automatic renewal option. Before the end of the subscription period, Time must 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.
Time will not mail solicitations to consumers for subscriptions that resemble bills, invoices or statements of accounts due. In addition, Time will not submit unpaid accounts of automatic renewal customers for third party collections.
Nationally, Time will refund $4.3 million to more than 108,000 eligible consumers, who made payments for magazine subscriptions that were automatically renewed between 1998 and May of 2004. Time also will pay $4.5 million to the 23 Attorneys General for their costs and fees.
Within the next three months, Time will send 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. As Time will be identifying eligible consumers from their records, 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."
Consumers wanting more information about this settlement and Oregon's consumer protection laws may contact the Attorney General's consumer hotline at (503) 378-4320 (Salem area only), (503) 229-5576 (Portland area only) or toll-free at 1-877-877-9392. Justice is online at www.doj.state.or.us.
Jan Margosian, (503) 947-4333 (media line only) firstname.lastname@example.org