Magazine Subscription Fraud: How NOT to Get Conned

Seems like you can't turn on the TV or read a newspaper anymore without hearing about some new scam aimed at retirees.

Fraudulent investment schemes. Phony home repairs. Bogus charities, you name it. The list goes on and on. No doubt you've heard of most of these scams.

Here is one that often tricks the best of us: magazines subscriptions.

Every day retirees like you are the target of a small group of unscrupulous telemarketers who offer "special deals" on magazines. On the surface, these deals may look like low-cost subscriptions paid in either weekly or monthly installments, but they are in fact schemes to milk subscribers for hundreds of dollars in multi-year subscriptions.

This scheme usually works in one of several ways. One method is when the consumer receives a sweepstakes notice in the mail urging the recipient to call a toll-free phone number to check on the status of a sweepstakes entry (despite the fact that the consumer typically has not entered any sweepstakes contest). If the consumer calls in, he or she gets shuffled to a representative who aggressively tries to sell magazine subscriptions to the caller.

Sometimes these sales pitches are made door-to-door by people who make emotional appeals, like a student selling magazines to get a college scholarship or other reward.

Other times, it might be a phony invoice or renewal notice that comes in the mail. In some cases, it may look like either a bill or a legitimate invoice from a magazine that the consumer already subscribes to--and sometimes the consumer will actually pay without knowing the "bill" is not real.

Consumers could also receive a call directly from a telemarketer making a sales pitch for either "free" or "pre-paid" magazine subscriptions. Consumers are led to believe that they will receive a subscription for a low monthly fee and can cancel at any time, when in reality they may be sold a two, three, or four-year subscription at costs ranging anywhere between $300 and $500--and find themselves repeatedly ignored when they try to cancel.

According to one recent AARP report, a woman who believed that she was buying a package of magazines for $6 a month was horrified to discover that she had in fact purchased a package lasting for four years at a price of nearly $500--to be paid in six monthly installments of about $80 each!

While only a fraction of America's telemarketers (up to 10% of about 140,000 operations across the nation, by some estimates) are involved in scams like this, they have proven their ability to fool even some of the most savvy of consumers. And make a lot of money doing it. According to most estimates, Americans lose about $40 billion to scam artists like these every year.

But you don't have to worry about ending up a statistic. And you don't have to worry about telling the difference between a scam and a legitimate sales pitch.

By taking just a few precautions, you can KNOW the difference and protect yourself. But most importantly, if the time ever comes, you can avoid being scammed.

WHAT TO DO IF YOU GET THE CALL:

  1. Listen carefully to the initial sales pitch.
  2. Be alert for buzz words like "free" or "pre-paid". Also look out for promises that you will only be charged a "processing fee," which is sometimes higher than the retail price of the magazine subscription.
  3. Beware of any attempts by the salesperson to pressure you into buying subscriptions.
  4. Be careful what you say to the salesperson over the phone. In some states, your verbal agreement to buy obligates you to pay. And sometimes these scam artists will tape record your conversation--claiming it's for your protection--but will actually use it later to "prove" that you knew what you were doing when you agreed to the sale.
  5. Don't be afraid to interrupt and ask questions such as:

    • What is the total cost of each magazine? What is the total cost of my subscription package?
    • How will I be billed? And how often? Monthly? Quarterly? Annually?
    • How long will the subscription(s) last?
    • How many magazines will I get with each subscription? And how often? Weekly? Monthly? Bi-monthly?

    Remember, this is YOUR hard-earned money that we're talking about. You want to be absolutely certain of who you're dealing with before you proceed with a sale. If you're not interested, or if it doesn't sound legitimate to you, you have the right to say good-bye and hang up.
  6. If it does sound like a good deal, ask for the salesperson's name, as well as the name, address and phone number of the company. Watch out for salepeople who refuse to give out this information. It's a good sign that they may not be legit.
  7. If you go ahead with the sale, request a written copy of the sales terms.
  8. Be absolutely sure of who you're dealing with before you give out information on your bank account or credit cards. NEVER give out this information in response to unsolicited promotions for the purposes of "verification", "qualification" or "for computer purposes."
  9. Contact the Better Business Bureau for a reliability report on the telemarketing company.
  10. Compare the prices you got over the phone to the regular magazine subscription rates offered through the publication itself.

WHAT TO DO WITH A DOOR-TO-DOOR SALESPERSON:

  1. Do not invite the person in. Try to keep a barrier of a screen or storm door between you and the stranger.
  2. If you are home alone, ask the salesperson to come back another time explaining that you are too busy to talk now or that you have company over.
  3. Never make an instant decision. Always ask them to come back to give you time to think about the purchase and to check out their offer. If they are legitimate they shouldn't mind returning.
  4. Ask for a phone number so that you can contact them to complete the transaction. If they are hesitant to give out that information, they probably are not legitimate. If they do give you a number don't hesitate to call the number for verification purposes.

WHAT TO DO WHEN YOU RECEIVE A "BILL" IN THE MAIL:

  1. Check all of your records - have you ordered this particular publication before? Are you currently subscribing?
  2. If the bill is for something that you have legitimately purchased, double check your records to make sure that the account numbers, addresses, and contact information all match. If anything looks suspicious you should contact them to verify before proceeding with the payment.
  3. If you don't remember ordering, and you don't have any record of the order, do not pay the bill. If they continue to contact you then you should make them provide you with proof of the purchase before taking any further steps.

YOUR RIGHTS

  1. If you don't want a subscription, you have the right to refuse AND to request that the caller put you on their company's "Do Not Call" list. If they DO call again, you can hang up and report the call to your state Attorney General and the Federal Trade Commission because the telemarketer is breaking the law.
  2. If you do agree to the subscription and later change your mind, you can cancel the order as long as it is IN WRITING and is within THREE DAYS of receipt of the sales agreement.

For more information on this subject, visit the following links:

The Better Business Bureau

The Federal Trade Commission

The AARP Foundation Litigation (a legal organization that represents victims of consumer fraud)

 
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