It’s happened to almost everyone: You signed up for a magazine, cable or dating website subscription, and without warning — poof! – the merchant automatically renewed it, locking you in for another year.
Unwanted auto-renewals are one of the leading sources of “grey charges,” a term that describes sneaky, deceptive and unwanted charges that plague your credit and debit card statements.
How can you avoid this? Here are a few tips.
#1. Always Ask – Over the years, the FCC received numerous complaints from disgruntled consumers who felt misled about a company’s automatic renewals. Many complained about being misinformed by employees.
The solution: Trust, but verify. While there are plenty of honest salespeople in the world, there are also, unfortunately, a few salespeople who just want to make a sale. Ask the salesperson if you can read the automatic renewal policy. Don’t rely on the salesperson’s word alone.
#2: Keep Track – Got a membership with an auto-renewal date? Need to opt-out of the auto-renewal by a particular deadline, such as two months in advance? Write it on your calendar. The free Google Calendar application, available to anyone with a free Gmail account, works with both computers and smartphones. It emails you a reminder when the date gets close.
#3. Cancel Immediately – Here’s a clever renewal hack: cancel your policy as soon as you order it. If you purchase a one-year subscription to a magazine with a “no refunds, no early termination” policy, for example, cancel the subscription immediately. You’ll still receive your one-year subscription. After all, you paid for it. But you won’t auto-renew into the following year.
#4. Stay Informed – Many customers don’t even know that they signed up for an automatic renewal because this information came in a giant licensing agreement. Studies and common sense both show that most people don’t read all of the licensing agreement or the fine print before signing a contract or clicking the ‘accept’ button. This is why many companies include this information in the middle of a lengthy contract.
If you cannot read through an entire licensing agreement, then scroll through and glance at the bold headings, to see if it includes any terms and conditions about automatic renewals.
#5. Disable the Auto-Renew Feature: Some companies have a little online checkbox (that usually comes pre-checked) that signifies that you’re enrolled in the auto-renewal program. Uncheck this box. Some computer programs come pre-loaded with automatic renewals. Disable this feature right away if you think you won’t want the program for another year. You can always change your mind later if you want to opt-in for a renewal.
#6: Avoid Forced Renewals – Some contracts carry strict requirements governing the timeframe in which you can opt-out of automatic renewals. Some apartment leases, for example, may stipulate that your lease will automatically renew unless you give the management company 60-day notice prior to your lease termination date. And they won’t allow you to cancel the auto-renewal clause.
The best way to avoid these shady contracts? Just say no! Decline to do business with companies that don’t allow you to opt-out of an automatic renewal.
#7. Fight Back – Some consumers are fighting back. A New York man sued two anti-virus software giants over their confusing automatic renewal policy. There is no reason that you have to submit to unauthorized charges to your credit card. If you do get hit with an unwanted renewal charge, don’t roll over and give in. Call the company up and negotiate to get your money back. (BillGuard can help you fight these charges – for free!)
#8. Be Patient – Some companies are easier to deal with than others. If you run into a stubborn merchant, don’t give up. Keep track of all conversations you have about this issue. The best practice is to write a certified letter to the company stating your situation and why you feel that these charges were unauthorized. When companies see a consumer willing to fight back, they often back down on the charges or negotiate a lower price.
Sign up for a BillGuard account today. We can help you fight unwanted auto-renewals and other grey charges.