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The Honolulu Advertiser
Posted on: Thursday, August 11, 2005

Know how to quit before signing up for CD, book clubs

By Michelle Singletary

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WASHINGTON — Have you ever heard of a "Prenotification Negative Option Plan"?

You probably have and just didn't know it. It's when you join a club or plan that offers to sell you merchandise, often at an introductory discounted price. You then agree to receive the product or service automatically unless you tell the club not to send it.

I hate negative-option buying. I always forget to cancel whatever it is I'm trying out and get stuck paying for books, CDs or magazines I don't want.

What's worse about negative-option buying is that often, you can't stop the product from coming even if you try. That happened to me once. I had just had my first baby and decided to try out a children's book club.

But I never got a chance to read the first shipment of books. First, my newborn only wanted to sleep and eat. Second, I only wanted to sleep and eat. I was too tired to read anything.

So I tried to cancel the book club membership. It was only then that I realized there wasn't clear information on how to do that. And when I say there wasn't any information, I mean there wasn't a Web address, telephone number or street address on any of the plan's materials to write to the company and cancel.

I know I'm not alone. In June, New York-based Scholastic Inc. and two of its subsidiaries agreed to pay a $710,000 civil penalty to settle allegations that the companies violated laws in the marketing of their negative-option book clubs.

The Federal Trade Commission alleged that the companies' direct mail and telemarketing campaigns did not give consumers important information they needed to know before joining the book club.

The FTC said consumers who did not know how the clubs operated complained that the companies sent them books they did not order, and that the companies would not cancel their club memberships.

According to the FTC, the first club — which the complaint identifies as the base book club — allowed consumers to inspect a pair of books and automatically enrolled consumers in the club if they kept the books beyond a set preview period and paid for them. This first club required a four-book minimum purchase and each month shipped books automatically after that.

If consumers made two purchases from the first club, the defendants automatically enrolled them in a second club.

"There's a message in this order for any business that runs a negative-option club," Lydia Parnes, director of the FTC's Bureau of Consumer Protection, said in a release about the settlement. "Your company is responsible for letting potential customers know the rules that come with their membership before they enroll."