This is an interesting article and will affect a number of people who use the pre-checked buttons at checkout time as well as the free-to-pay conversions orders where the terms are not clearly disclosed. This settlement is limited to the state of Washington, but the FTC has been very proactive in this area as well.
On May 24, Seattle-based RealNetworks, an internet media company that provides streaming content, agreed to a $2.4 million settlement with the Washington State Attorney General (AG) to resolve more than 500 consumers’ complaints of “odd charges” appearing on their credit cards, as well as bills for monthly subscriptions for premium television, sports or game content that were never ordered.
According to the state’s press release, many of the charges were the result of “deceptive” pre-checked boxes and fine print that obligated consumers to accept free-to-pay trials of subscription services when they downloaded the company’s RealPlayer media player. The state also alleges that the company used similar tactics to drive cross-sells when consumers subscribed to one of the company’s premium services.
The AG’s office also alleged that some consumers had difficulty getting RealNetworks to stop the unwanted charges and were pitched more “free trials” during their cancellation calls.
The settlement requires RealNetworks to provide restitution to consumers and comply with the federal Restore Online Shoppers Confidence Act, which requires a customer’s express consent before he or she can be charged for a free trial that converts into a paid subscription.
Other terms of the settlement require RealNetworks to:
- Stop using pre-checked boxes to obtain consent from consumers to purchase products or services;
- Stop offering free-to-pay conversions that do not clearly disclose all of the terms of the offer, including subscriptions that are automatically charged on customers’ credit cards;
- Provide an online method of cancellation so that consumers may easily cancel their subscriptions;
- Send e-mail or other reminders that consumers are enrolled in a free-to-pay conversion, along with instructions for how to cancel the subscription;
- Cancel subscriptions within two days of a consumer’s request to do so; and
- Inform consumers who have called to cancel a subscription of additional subscriptions on their account.