They'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 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.
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-FTC-HELP (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.
|
FEDERAL TRADE COMMISSION |
FOR THE CONSUMER |
1-877-FTC-HELP |
www.ftc.gov |
|
June 2002