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Be careful of subscriptions that automatically renew



Children’s online learning program ABCmouse to pay $10 million in damages

Don't get caught in an online subscription renewal scam


Many online subscriptions of all kinds renew automatically, and in most cases, if you want to cancel, it's a straightforward process. But homeschoolers, as well as others who use learning websites, should beware of companies that don't inform you when the subscription is being renewed and don't provide an easy way to cancel.

The Federal Trade Commission website reports details of the recent case of ABCmouse, an online learning program for children, which is charged with misrepresenting its renewal policy, leading tens of thousands of customers to be renewed and charged for subscriptions without full consent. When customers tried to cancel, they found the process so lengthy and confusing, many of them were unable to complete cancellation.

The operating company, Age of Learning, Inc., offered a year's subscription at a discounted rate but did not ask for confirmation of renewal when the year was over. Another offer of a one-month free trial similarly led into automatic charges. When customers emailed or called to cancel, they were told they had to go through a specific cancellation procedure that often failed to produce results, despite the promise of “Easy Cancellation” advertised at the time of enrollment.

Even if they did complete the cancellation process, many customers found themselves still receiving charges for the program. According to the FTC, “Company records show that, between 2015 and 2018, hundreds of thousands of consumers who visited the ABCmouse cancellation path nevertheless remained subscribed.”

In addition to paying a $10 million settlement, ABCmouse is now required to communicate terms more precisely with potential customers, especially when using the words “free,” “trial,” “sample,” and “no obligation.” The company must obtain consumers’ informed consent before enrolling them in any automatic billing programs and must provide simple cancellation mechanisms.

The good news is that reports of the judgment are being circulated in business publications, so hopefully the FTC's action will inspire other subscription-based services to operate more efficiently and in good faith. But when you subscribe to any service, it pays to keep an eye on your credit card bill.



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