Not sure I believe that. Even if it's true, it means they include everyone who watched a _single_ thing.
I feel like they are doing the minimum change necessary to try to reduce legal problems. They have actually probably had a lot of people try to sue them for charging them for a service they have not used for months and months, when they forget about it and then notice the charges.
A reasonable strategy would be to stop charging customers who haven't watched in a while, but leave them enrolled as subscribers. If they start watching again, start charging again.
I wonder if it is different if you were never a paying user? I did the free trial in February 2019 and then cancelled. If I try to login now, it starts going through the whole set up a free trial for a new user process, with no indication that it recognizes my account.
In fact, if I try to login with the email address I used for the trial and any random thing for the password, it goes to the new user trial setup.
If I hit thee "need help" link on the sign in screen and try to initiate a password reset, it tells me there is no account for my email address.
A good way to rank the level of scumminess among SV companies: Signup with a credit card and don't validate your email address or ever sign into your account. You'd be amazed how many companies will happily start charging you.
I should clarify. You sign up for a free trial and never log in and never confirm your account. Scum kings will still begin charging you after your free trial ends.
I routinely cancel subscriptions for S3stat customers who have forgotten which old employee first signed up for the service, or just don’t want to bother logging back in to do so. A name, or even company name is plenty.
What? No thank you. Having to go ensure I'm keeping all my grandfathered accounts together would be a nightmare. Jesus Christ. I have no problem paying $2/mo for some random feature I've forgotten about.
If you want to do it, set it up so all charges must result in 24-hour notification to customer and option to cancel future charges.
This whole reaction makes me understand why California has all these backwards-ass propositions. Everyone just wants to make any damned random thing a law.
A few scummy companies put huuuge termination fees in the case of a customer's death. In one case it was equivalent to 100 years service for a phone setup my grandfather had!
In most cases I bet they get paid - usually whoever is overseeing a loved ones estate really doesn't want to be going to court etc.
It was a $3 per month business VoIP phone number redirecting service, and the termination fee was $3000 if you didn't use the correct termination procedure, which involved knowing a password in a web form only my grandfather knew, or passing a 'my password is my voice' phone login. They also allowed termination by a letter to their HQ, with a $3k fee. I think the fee was more of a "we can only offer low prices if everything is automated, so we charge a stupidly high fee for anything we can't automate".
I don't want to name the company, because the dispute is still ongoing.
I always wonder when a company does this if it is completely altruistic or if something else is going on behind the scenes.
Maybe notifying customers gets them to reactivate, maybe if they resubscribe later they can charge more, maybe it’s better for financial reporting and projecting subscriber counts.
On the other hand it could just be a rare moment of a company doing right by the customer.
This is an excellent question! I wouldn't be surprised if notifying someone that their subscription is cancelled due to inactivity would cause them to suddenly value their subscription.
Amazon did this for me back in 2005 when they introduced Prime. I used the free trial for an order (to get it in two days), but then didn't order anything else and forgot to cancel.
They sent me an email that they weren't going to charge me because I hadn't used it, but I was free to sign up in the future if I decided I wanted it.
It was so refreshing, it made me a lifelong customer.
Early days of EC2 were chock full of stories like this - Of kids / engineers running up their CC bill because they screwed up in some way they didn't anticipate and Amazon CS would bail them out.
I don't think this was a cynical marketing ploy designed from the top down either, it was a very natural thing for the company to be customer obsessed and trying to do right by them.
> I don't think this was a cynical marketing ploy designed from the top down either, it was a very natural thing for the company to be customer obsessed and trying to do right by them.
It's trying to do right by the legal and finance departments, not by the customers. Going after someone for anything less than a mid to high five figure AWS bill is never worth it because the legal costs are astronomical, the defendant probably can't pay in the end, and the cost of defending will drain the customer of any more resources that could have been spent on the cloud.
It's the cost of doing business. The choice is between trying to bleed a rock or a safe bet that LTV will be higher than the marginal cost.
At the request of an EC2 support staff, I left some machines running to help them debug an issue where machines became unreachable within minutes of being created. I was erroneously charged for this. Throughout the years Amazon has variously said that they could not refund me because they had no records from this time period or offered me AWS credits. I expect to the situation to never be resolved.
On a related note -- Audible free trial seems.. offered cyclically?
I seem to sign up every year or so, spend my credits, and cancel. They keep offering it though, and now I'm considering buying (as I enjoy the medium, turns out), so I suppose it worked.
Prime does that for me too, recently it has changed from free to one-week-for-£1 now though. The great thing is if you forget to cancel at the end of the trial and they charge you, they will refund you if you haven't placed any orders in that billing period.
I was in a similar situation except I didn't use it even for a single order. They kept charging me after the free trial period. After a while I realized this, and cancelled. I reached out to them requesting a refund, at least partial since I haven't used it even once. But they did not refund any.
Amazon definitely doesn't do this now. Amazon sometimes offers me a free Prime trial and they make it fairly clear that if you don't cancel before the conclusion of the trial, they'll automatically subscribe you to Prime and charge you. I'll sometimes take the trial but I always mark my calendar to cancel before the renewal.
Personally, I consider this to be a dark pattern and it makes me reluctant to sign up for any trial or even subscription services in general. I'm glad that Amazon is upfront about it but would prefer that they didn't do this at all.
I'm pretty sure they let you disable auto-renew immediately after signing up.
What's sketchy is that Amazon's Audible deletes all your unused book credits if you unsubscribe. If you don't know what to buy with those credits and you want to unsubscribe, you face the decision to keep buying credits, or lose the credits you already paid for.
Fortunately, there are a couple of workarounds. There's the option to pause your subscription for 3 months, or you can buy a book, cancel the subscription, then return the book to recapture the credit once you find a book you actually want to read.
last i checked, they let me cancel prime effective immediately, not allowing me to continue my year that i purchased. There isn't an option to stop auto renewal.
Their Prime subscription was a pain to cancel in Belgium. I found it on the German site, even though I always use English and there for the English site.
They also use dark patterns for it, unsubscribing is very confusing.
Agreed on the dark pattern and difficulty of cancelling. Today I cancelled my Prime subscription and had to first the cancel button, then I had to click "Cancel my subscription" button three times, which I had to find it along with ambiguous, same color "Keep my subscription and pay" buttons.
Shame that corporate responsibility is out the window now then.
You can't do anything on the Amazon store without being goaded into signing up for Prime and having to triple check what you are clicking on during checkout to make sure you don't sign up by mistake.
My wife already has a Netflix subscription despite Amazon's attempts to hook her on Prime (I'll take credit for stopping that). After this this news it seems it was definitely the correct choice.
It's probably worse for them if customers cancel, because customers are unlikely to resubscribe to netflix having cancelled versus trying a competitor streaming service. Better psychologically to have an inactive account than to lose an account.
(Also netflix would have to report all those unsubscribes to shareholders, but this way no one cancels and they're framing it positively as consumer-friendly).
So if netflix incentives people to people keep their accounts, they remove the friction from what would otherwise be a high-friction resubscribe.
As long as netflix believes they can get people to come back for an occasional exclusive content hit-show, then they can reactivate the payments for a while.
They likely have to use the number of customers who are inactive and probable to request a refund, then use that estimate to calculate the size of a liability account which must be held on the balance sheet.
As it grows, that hits the pnl anyway so from an earnings perspective it doesn’t matter too much. Couple that with the cost of customer service calls etc. + the inactive customer count + the goodwill and the decision seems rational
I believe it's a good step to take as a company. They have the resources to do so. They will be ahead of other companies in that regard. Also, if it becomes a law that companies should _not_ charge inactive customers, Netflix will be ready.
For example, often you hear angry customer who is like "can you refund me, I didn't use it this month, you can check your records"
Then request is passed on to some other employee who confirms that they really didn't use their account.
After that you issue refund.
In most cases, you end up issuing refund either way while in some cases customer forgets but he doesn't forget he got charged. So it counts towards negative experience even if a customer didn't complain about it.
If your company is here for long term then every negative experience matters.
We do this at my company, and it is purely for altruistic reasons. If people aren't happily making good use of my service, I don't want their money. That's the entire calculus.
Netflix is vastly bigger, granted, so who knows what machinations are afoot for them. But it is certainly believable to me that a company could choose to do something explicitly anti-greedy.
Really the only valid reason to do this is that the goodwill will help them make more money in the future. Strictly losing money with no upside in the future is in violation of the "duty of loyalty" that all corporate officers have toward shareholders.
This. If someone is paying for your service and not using it, perhaps they have an inaccurate idea of what your service (and their payments) actually entail. If that's the case, then you have a customer who's going to come to you eventually to figure out what the hell they've been paying you for all this time, and/or in need of a particularly expensive crash training course (because it's coming out of nowhere). Better to drop them and then onboard them again as new customers (which, functionally, they would be) if they decide to come back.
There ARE industries that survive on the, "One loud sign-up multiple silent payment extractions," model; everyone hates them and they have to ju~st skirt regulations to get by ("I'm sorry, we didn't receive your cancellation, please fax it with proof of necessity, last month's payment is still due.").
If I sign up for a gym membership and then don’t show up for months on end, I don’t feel like I’ve been swindled — I knew that’s how it works when I signed up. I’m not confused about what a gym membership is for or why I’m paying for it. I might still never cancel because I don’t want to admit how lazy I am, so each instance of me considering the wasted money ends with me thinking, “I really should get to the gym more. Maybe next week.”
This same dynamic plays out with any service that sells you long-term self-improvement but is burdensome to use. Exercise tracking apps, diet tracking apps, health-conscious meal kits, subscription lessons for music or foreign languages, etc. There are shadier examples for sure, but it’s not always cut-and-dry evil.
On the flip side I think it’s probably cheaper to cut ties with an inactive user than deal with small claims lawsuits, chargebacks and other hassles from people who forget they are subscribed.
Honestly I could see this being an honesty test class action at some point.
On the other hand, you can also do it nicely even in self-improvement space. Beeminder comes to mind; they let you set your productivity goals and costs of not meeting them, and they only ever charge you if you fail, and accept that you've failed - charge is automatic, but if you tell them there were extenuating circumstances, they'll give you that money back.
Long term, both being, and being seen as the kind of company that doesn't needlessly abuse their customers, is in the best financial interests of a company.
US courts have ruled that company management have "wide latitude" in how they manage the company.
(The reason is that the courts don't want to get involved in the minutae of running private companies. They'd rather you just update your company bylaws.)
However, shareholders, or most famously private equity (PE) companies, may pressure mgmt. to adopt certain policies and goals, and use their voting shares to encourage or even enforce that.
The standard, from In Re Walt Disney, is that business decisions aren’t reviewable unless “the exchange was so one-sided that no business person of ordinary, sound judgment could conclude that the corporation has received adequate consideration".
In, Shlensky v. Wrigley, the Chicago Cubs’ were sued for refusing to install lighting for nighttime games: their president believed baseball was best as “a daytime sport." This is absurdly nebulous (and kind of bizarre), but the Cubs nevertheless won.
That decision was based on Davis v. Louisville Gas and Electric Co, which says “the directors are chosen to pass upon such questions and their judgment unless shown to be tainted with fraud is accepted as final. The judgment the directors of the corporation enjoys the benefit of a presumption that it was formed in good faith, and was designed to promote the best interests of the corporation they serve.”
It is probably true that this policy earns Netflix some intangible goodwill. It might plausibly make them more money. However, even if it didn't, it would still be within its rights to implement such a policy.
I'm amazed how many SaaS users are zOmBiE uSeRs, this is from working on client SaaS apps. One had about 20% of the users paying and not even logging in for months or even a year.
Props to Netflix for unsubscribing users who don't use the service.
I think the wider point is that it's amazing how lax and careless so many people are with their personal finances. They think nothing of wasting hundreds (thousands?) of $$$ a year on unnecessary purchases, including things that they don't even use (like old software subscriptions.) Then they complain that they're broke.
When I hear sob stories about how #{big_number}% of people can't afford an unexpected $500 bill, I'd love to know how many of those people would easily have $500 in savings if they cancelled all their unused subscriptions and stopped buying a new smartphone every year.
Spoken like someone who has never worked a minimum wage (or close to it) job. There is no savings. There is no extra smartphone. There is barely food and rent.
Were those B2B SaaS? Subscriptions are a huge controlling challenge for businesses with more than a few employees. If they are easily available people will think that it's fine to keep them running, I they have to jump through hoops to get them they will try to avoid repeating the process.
Sure, businesses like to control spending, but this scenario seems backwards. If the hoops have been jumped through to get the subscription approved once, and one might need to use it again in future, why would one ever cancel it? Whereas, if subscription approvals were easy, one would be more likely to worry about spending the firm's money unnecessarily.
This is sort of like the fact that strict border controls encourage undocumented immigrants to stay once they've passed the border once.
> Many people give money to ensure that a service is available when they need it.
Netflix, as a service, takes ~10 minutes to set up. This might be the case for a software suite like CC, where you might need to download a massive amount of data, or other software where you pay annually or enter into some kind of contract, but Netflix is strictly monthly and easy to sign up for by design.
That is mostly, but not entirely true. If one's Netflix account is deactivated for more than 10 months, they lose their history, preferences and personalized results.
When I did have Netflix, the history/preference/personalized results were a detriment to my experience, as Netflix would intentionally make it harder to find what you wanted to watch and jumble things around constantly to make their content library seem bigger than it was.
Netflix also has use-cases where it's much more difficult to sign up. For example, someone who watches Netflix on a game console (Xbox, Switch, etc) might only occasionally watch it, and also have a much longer sign-up process (not only the flow, but also dealing with console keyboard, not having a password manager, etc). Ditto for people who use other hardware like Chromecasts and such and may not have a dedicated "computer" where it's quick to just sign up from when they find they've been downgraded.
I also run a business designed to be used in the moment when an author is struck with inspiration. It takes less than a minute to upgrade or downgrade (and some users choose to only upgrade for hours at a time each month with no penalty, aka a month of subscription time sometimes lasts a full year), but when I experimented with automatic downgrades to those who hadn't signed in all month I got complaints that they "weren't able to just log in and use the service they paid for".
Could just be a notice thing (improving messaging to more reliably let users know they've been downgraded), an option (letting users opt-in/out of automatic downgrading), or have other solutions (maybe refunding instead of downgrading?), but it does seem that at least some users like to feel like they're paying for something to be "at their fingertips" when they need it.
It probably also stops people from unsubscribing, which means they may check on Netflix more often and possibly watch something again. Also if they go to resubscribe they may fall prey to the signup form attrition rate, so ensuring they don't have to fill that out again helps.
Is your company private? If you're not heavily funded by investors you probably have more freedom to behave according to your morals than if it were otherwise. Public companies are always looking to meet shareholder expectations on the other hand.
Not saying they can't occasionally make altruistic decisions like this, just that more people's interests are being weighed.
Always might seem a bit strong, it is always according to shareholder capitalism. But many companies find that shared value creation [0] works better for them in the long term
That's not a requirement or anything. There's no law that says you have to maximize short-term revenue at the expense of customer happiness.
I think it's become common because the average public company CEO tenure has fallen by 50% over the same period that their compensation has gone up 10x. Now it's in their strong interest to juice the quarterly numbers and not worry about anything particularly long term, because that's going to be the problem of some other sucker. And similar incentives apply all down the executive hierarchy. The faster people move around, the easier it is to make bonus-related metrics go up even if it harms things a few years down the line.
I'm guessing that "if you stop watching, we stop billing" helps a lot in getting users to sign up for a trial with their credit card. Not sure if it's been tested, but it does seem like a reassurance that might go a long way.
At some point the cost-benefit calculus has to flip. Users on the extreme right-tail of the months-paid-but-unused distribution are a negligible amount of revenue but very likely to complain when they noticed they’ve paid for years of unused service. If the company refunds these users as a matter of policy, it creates uncertainty in the accounting and negates the value of them being allowed to keep paying. If no such policy exists, it creates a reputation risk: “YoungPersonApp bilks $2000 from grandma with Alzheimer’s”
“Doing the right thing” and “managing reputation risk” are often indistinguishable. The details of Machiavellian self-interest can be difficult to codify, so a semi-sincere effort to do the right thing can be safer.
This is the essence of Dale Carnegie's argument why we should just do the right thing. It's always a hedge against losing reputation and that is always more valuable than the marginal benefits gained from the wrong thing.
It’s softer than a full cancellation, I bet. Cancellations were probably going the wrong way and this lets people “go inactive” without cancelling—coming back is just opening Netflix and starting a video, rather than re-subscribing. They want you not to have a reason to unsubscribe.
Pure altruism can be a great business and life strategy. How does someone feel when they realize they’ve spend thousands of dollars on a Netflix account they don’t use? It’s not in Netflix’s interest to have people out there hating Netflix.
Ever see a person who was just really great to everyone and the world seems to have rewarded them for it? That doesn’t always happen but sometimes it does.
My guess is that a big part of the reason is that Netflix realizes people are switching between streaming services all the time - this quarter they're paying for Netflix, next quarter they're paying for HBO Go, etc. So they don't want to be remembered as the service that's hard to cancel, otherwise people may be reluctant to come back to them.
Just one theory:
If I go to a restaurant I expect they'll give me to-go box if I ask for it; If I accidentally buy they wrong size shirt from a high-street retailer, I expect to be able to return it. If a business doesn't meet these generally-agreed on "consumer expectations" they may be complained about viciously.
If Netflix can successfully normalize "only charge me if I use the service" into a basic consumer expectation for subscription businesses it might cost Netflix a little, but it might cost their competitors a lot more.
Interesting argument, I am curios though why this would hurt other streaming services more than netflix? Is this based on an assumption like "netflix has more content so less people will not watch anything for a few months than on [other platform]" or something like that?
Netflix competes with cable TV which has famously infuriating billing practices. they also compete with any “digital entertainment” you might choose to spend money on instead of Netflix: Xbox live, Spotify etc
I read once that for Netflix, these users were not seen as "easy money" but as a genuine problem, because that's revenue they can't count on to last.
Their action both removes a problem on their side and is good for customers. Win-win. So probably not entirely altruistic (nothing is), but at least partly.
Does anyone else find it unfortunate that this entire topic is devoted to the fact that we find that a company being ethical about their business practice is so out of the ordinary, and we're spending a lot of energy guessing what nefarious motivation might lie behind it?
It sounds like the most relevant thing to discuss too, and guessing that is always a good exercise too keep yourself on your toes. Large institutions mask often mask their intentions in ways very difficult to figure out, so maybe a thousand people can put it together. It sounds like misplaced effort only as long as nothing comes out.
Making money is the reason why a for-profit business exists. Keep charging customers because they neglect to cancel is unpleasant, but can hardly be qualify as unethical.
Yeah, HN's classic cynicism is in full effect here. The truth is that companies are made of people and very often the people just want to make a good thing that's nice and works well.
My favourite is Gusto. Why is Gusto so good? I only use it twice a year or so, the guy buying it isn't the guy using it, and the principal value in their business is integrations not UX. Well, Gusto is good because they want to be good. I'm happy with that explanation.
This is a great opportunity to thank Unbounce (https://unbounce.com/) - Years ago I was helping set up patient recruitment for a clinical research lab and forgot to cancel the sub after it was over. I got on chat about a week after the cycle ended and had that one billing cycle refunded. It was only $40 or something but the impression has lasted years probably in relation to all the horror stories I’m reading here.
This is where my mind went too. I don't think Netflix has generally grandfathered-in pricing, my bill has always gone up when their advertised price does. If there are some folks who are getting a year or so of promo pricing, I don't see how cancelling their accounts is advantageous.
Yeah I appreciated it a lot. They also prorate by active users, so if you're paying for 50 users and only 20 were active, you get a 60% discount. Super solid as a way of doing business.
Exactly. And while I don't want have the urge to use Netflix anyway, I'd sign-up for a gym that charges for actual usage without hesitation.
But that's why it only more interesting. We all are sadly accustomed that selling subscriptions you would never is the business model of most gyms. But then, what would be the reason for Netflix not to do this? This is really weird, I don't believe they would do this just to be good guys, and I don't see what can be the reason for them to do that otherwise.
That’d actually keep me subscribed longer I think. Right now I’ll batch stuff up and binge it all in a month and then cancel for another how ever months it takes.
I'm so eager to know how will people start to think of some bundled call phone plans such as a T-Mobile's family plan that I used for a couple of years. The Netflix subscription is offered "for free" with a "1? dollar value" but of course there is no refund if I don't watch it. Oh wait that's how mobile plan always worked.
Credit cards only last a few years before theyre expired and replaced. I'd think only very few accounts are unwatched, after 24 months I'd think more than half of CCs would have expired anyway.
Thanks for the link. I've also had the utterly bizarre experience of a service charging my old card number for MONTHS after it expires, have the charges go through, THEN tell me my card is expired 3-6months later and force me to update.
Probably a related thing where they want to keep receiving revenue from me without interruption to my service, but ultimately need to confirm it's not fraud?
I just got an email saying that account was cancelled. For some reason I signed up for a second account, so I could get DVD service, received the DVD and never cancelled. Should probably return the disk... if I can find it.
I have a DVD and a streaming subscription. I use the DVD fairly often, but the streaming rarely. There’s very little I want to watch available on streaming. I really should cancel.
> It'd be hard to convince me that they did it because they're nice, they have share holders who are not interested in that stuff.
100%. It might have something to do with wanting more clear/precise analytics numbers. Non-active members might weigh down certain metrics in some way, so removing these members likely allows for 'fuller' analytics/measurements, which is important to their core business. Netflix is now also a very active producer of content itself, instead of it's previous business model of licensing/'renting out' others' content, so clearer and probably higher engagement metrics (once non-active memberships are removed) helps one of it's core competences.
It's purely a business move. Their blog post is PR.
Years ago, I heard of a dating site doing the opposite of this. They normally sent periodic digests and newsletters to their users to try to increase engagement, but if a user went a certain number of months without logging into their account, but still allowed monthly fees to be charged, they were labeled as a “sleeping giant” in the database. Once in this state, they would not be contacted by the site for any reason until they logged in again by their own initiative. The site had determined that, on average, contacting these users had a net-negative effect on retention — i.e., they would be reminded that they were paying for an unused service and cancel.
My gym (a very popular UK-wide chain) has suspended all customer payments while their gyms are closed during lockdown. Instead they're spamming me trying to get me to pay for their workout app which they obviously knocked out in a hurry in an attempt to salvage some cashflow during this crisis.
I can't blame them for trying, but it's definitely not a good time to be running a gym.
I’m quite sure hellosign does this as well. I did not receive a single email from them for two years, but they charged me $140 two times. I never used their paid offering. The second year, I never even logged in. I received no marketing emails, no “you’re about to be billed” emails, no “we received your payment” emails. It seems wrong.
Cancelling for XboxLive has always been a pain (at least until 5 years ago, I don't know now): they make it easy to subscribe online and pay with a credit card, but cancelling forces you to look for a phone number buried in help pages and call a hotline that's only open during business hours or something. Pure dark pattern.
This kind of stuff should be illegal. In GDPR, they put a clause that rescinding consent must be as easy as granting it, precisely because of that.
(Not that I've ever seen a site on which there was an obvious way to bring the consent popup back up after it was closed, but hopefully one day data protection authorities will unclog their pipes and the fines will start flying.)
I cancelled through their website around 6 years ago. I didn't find it particularly hard, and it definitely didn't require a phone call, but maybe I just got lucky by randomly happening across the correct page.
How does this even happen? I'm just curious here. Don't you check your bills? I find it hard to imagine I would miss a recurring payment on my credit card receipt.
There are people out there who make enough money that they don't bother with an item-by-item check of each charge. I can't blame them. Being that careful is a huge cognitive load that scales with the number of charges even if it comes back to bite them when times aren't so good.
Now that I think of it, in the US people probably pay everything with a credit card? That would definitely be a longer list of expenses to check. In Europe the default is to use debit for physical card transactions, and credit much more rarely mostly for subscriptions and online purchases.
Debit cards are pretty popular in the US. Cash is used more than in Europe, partly because about 20% of the country doesn't have a bank account, partly because a significant number of who do still prefer using cash.
Personally, I use cash for day-to-day transactions, credit if I want the third-party record or it is a larger transaction. I never use debit because the protections are stacked against the user, and CC cash back schemes refund a portion of the credit card cartel tax. So not using it except at the bank ATM means I don't have to worry about the number being abused, unless my bank's ATMs are compromised.
my current bank app (in europe) just sends me a push message on any transactions made in my name. and the previous bank had a sms service for the same
not much cognitive load or anything (i disabled sound for these and just check em once a day) and very hard to miss any transactions you didn’t really authorize
My expenses are 30% of my income and I use a credit card for everything. Bank automatic deduction at the end of the month. I have a ballpark expenses figure I pay monthly. If I don't see a >10% increase in spending, I don't bother to check each item.
The Economist did this to me. $5/mo and then auto renewed at something like $250/yr. All my credit cards are just auto pay full balance every month, and I don't check them as often as I should. Noticed the charge last month, found out they had been charging me for years for their digital subscription.
My economist sub renewed at a cheaper/more reasonable rate (I think the common $130/yr that's at least better than newsstand) but I just think their subscription services are in the utter dark ages. Changing anything (Updating an expired credit card, change of address, etc) is painful.
Address was pretty easy, but if you don’t have the link they emailed you when your credit card expires then it is pretty much impossible to update your payment information.
What happens if you block them, or your credit card, so they'll get no money?
Is there any risk they'd sue you? Or other auto renew services, what do you, or others, think — do they sometimes sue their customers whose credit card expired?
That sounds annoying b.t.w., having to call them etc.
I believe it’s fine to simply email them. The self service on the Economists website is notoriously bad. It’s not really because it’s not working or that hard to use, it’s just insanely poorly organized.
It’s uncommon, but some will send your account to a collection agency, which has automated the process of causing you enough trouble that you’re likely to just pay if it’s a small amount.
This happened to me, but I had to laugh when I discovered that the agency's tactics were limited to a few stroppy letters and a couple of phone calls that went:
"Hello sir, this is (collections agency). Can you confirm your address, please?"
"No."
"I'll have to end the call then."
"Okay."
I would feel awful if I caved in and paid money I don't owe just because a company told me to.
I don't know the situation in US, or other places, but companies don't have time to deal with legal issues, regarding user debt, so they delegate this process to collector agencies.
And those agencies are very happy to assist, since they get a % for their work, and when the money is big. Most of they time it's very productive. Letters and calls are just the first step. A debt of 300$ can get to x000 pretty fast (debt, fees, lawyers). And then they go to court, put financial blocking on your assets, there is a judiciary person in charge of evaluating your assets, bank accounts, they can even freeze your debt from your bank accounts if you are refusing to pay a legal debt.
If you are abroad they will happily wait for you when you will get back, or get in touch via one of their foreign agency and let you know they are near.
If they would really want to get you in trouble they can inform the foreign local authorities about your problems, so depending on the case they can create problems for you.
Check if your local library offers ebooks and emagazines it might include The Economist. I am member of the Westminster Library here in London and they have The Economist for reading via RBDigital:
If you have a Kindle, you can read The Economist for free each week using Calibre. The Economist is one the News Sources in Calibre that you can schedule for sending to your Kindle. It arrives each Friday morning with all the articles, without the ads.
Financial Times was the worst. It was like $1 for the first three months then SHOT UP to $70/month. I think they finally added it to their subscription page but it was a huge surprise.
There’s a growing app industry to combat these dark patterns, an industry with its own costs and benefits. I believe iOS and Android also are incorporating dashboards and tools to manage subscriptions made via Apple Pay and Google Pay respectively.
I would love to know if any of these are actually good, instead of just their own scams. I just want to see all recurring payments grouped by something intelligent (like the vendor and/or the amount).
The intermediary services themselves (by Apple and Google) are surely no scams, I'd consider that a certainty even on the simple observation that they already are ridiculously effective money making schemes when they are entirely honest.
But it's not quite clear unfortunately how much protection they actually offer. A bad player could still try to enforce some hidden EULA small print that claims to empower them to ignore the cancellation and send bills the old fashioned way after cancellation on the intermediary. I really don't know if Apple or Google are taking effective steps against schemes like that or if they have just been lucky so far that those scammers are still finding enough prey outside of the walled gardens.
(ps: re-reading this comment I find myself sounding more critical than intended, actually I love subscribing through that kind of intermediary, I'd even consider paying extra. I'm just afraid that the protection offered might not be quite as strong as it seems)
This is why I always pay with Apple or Amex... these guys make lots of money from their customers and are always ready to tell some seedy vendor to get fucked.
This is what Hulu did to me, and frankly, these companies are optimizing for short term revenue rather than for people actually want to pay for their products.
"fascinating" might not be the best word for a behavior like this. "smart" might also sound like an hyperbole to many. if you really want to earn more money, this kind of petty tricks are not difficult to figure out. overall, some people might take it like you being interested in applying this kind of tactics yourself.
This is why privacy.com is great. Whenever I sign up for a subscription, I create a virtual card and after paying for the first month, I "pause" the card (ie. decline all additional charges). When I get the notification that my payment failed and I'm actually getting value out of the subscription, I log in and change the status to "active" again.
A cancelled credit card does not mean bills are automatically void or the recurring subscription cancelled, but it's a scale whether it's worth it for the company to try to collect or not.
If your rent autobill fails, I think everyone realizes it doesn't mean you don't have to pay. If the credit card for your gym membership expires, I think most people would likewise fear (and has been known to happen) that your bill would eventually be sent to collections. A $5/mo subscription? Not worth the time of the company to try to collect. A Salesforce or Adobe subscription on a card? I certainly wouldn't gamble on that, and would try to properly cancel the subscription.
Almost every major business cloud provider? Agree with you that something like Netflix is entirely safe, but AWS as a major example has an entirely post-paid model.
> Almost every major business cloud provider? Agree with you that something like Netflix is entirely safe, but AWS as a major example has an entirely post-paid model.
That's not a subscription, that's metered billing, where you are billed for what you have already used.
> A cancelled credit card does not mean bills are automatically void or the recurring subscription cancelled, but it's a scale whether it's worth it for the company to try to collect or not.
Excuse me? If the bill is prepaid you bet your ass it means the subscription is cancelled. You can't pay, they don't continue to provide the service, end of story.
> If your rent autobill fails, I think everyone realizes it doesn't mean you don't have to pay.
The difference is that rent is paid after the fact and is typically part of a lease contract. What contract are you signing to get Netflix?
> A $5/mo subscription? Not worth the time of the company to try to collect.
Who's out here providing $5/month post-paid subscriptions? I have literally never heard of such a thing. Metered billing is a different story, but the discussion is lawsuits over Netflix subscriptions.
> It sounds as if you are not worried that they would sue you?
Netflix subscriptions are prepaid. What on earth would give them the idea to sue if your card is declined?
If your current month runs out and your renewal is declined, they just don't authorize you for a second month of service. There's no breach of contract, there's no debt for services rendered, I can't think of a single motivation to sue for this.
They could do that, yes. They could also open an account automatically in your name and then sue you over it. I expect both would be equally successful.
The former could be a natural consequence of neglect + shareholders asking why the cash influx is too low considering the number of actual subscribers.
Many if not most agreements these days seem to specify charging up front and reserve the right to cancel your service for any reason, so credit doesn't enter into it. I don't know about Netflix specifically.
What seems more likely is that they would blacklist you if you're obnoxious.
The post was probably referring to companies/subscriptions in general. The "contract" is separate from the method & frequency of the payments => even if you stop paying you still own them the old&new amount(s) as long as the contract hasn't been cancelled/terminated.
Years ago, my CC expired with an active Xbox Live sub attached (I moved overseas). Microsoft flagged my account as bad in some way, and years later when I moved back and tried to resub they didn't let me. Their loss, as I never spent another $ on Xbox after having purchased over 30 360 titles and been a Live subscriber since day 1.
I'm getting charged by rhapsody.com every quarter for no apparent reason. I used their service like may be 8 years ago. They have a phone number in their merchant line which is invalid. When I filed request to void the charge to American Express, initially they declined! Then I filed appeal with angry comments and they finally voided it. It took over two months for the process. I just saw new Rhapsody charge again. The credit card companies literally have no control over who can charge us.
If anyone at stripe is reading this, I think this is golden opportunity for consumer focused payment service. One should be at least able to block a merchant from charging my card. I can do that for spammer email but can't do that for spam charge on my card - in 2020!
This was a revelation sometimes back and it was Amex (relatively new in India) but I am sure it would be same for any credit card issuer. I had a VPS in Europe that I had emailed the support to cancel about a year ago and they had replied telling me I could do it myself (listed the steps) or they'd need another confirmation from me to go ahead and cancel. I forgot about it.
Got charged some 40 Euro a year later. I was shocked. My first thought was a compromised card. But immediately afterwards I received invoice from VPS provider. I called the bank and asked them how did that happen. They said it's possible. Lucky for me the provider immediately reversed the charge.
The thing is I had cancelled that Amex card almost a year before that charge had happened. It was still charged! I was baffled. Coming from a country where literally every credit card payment has to be authorised via an OTP or password (since as long as I can remember) it was a whole new world for me.
Well, that cancelled card was charged again (almost a year after I had the last experience) when I shopped at AliExpress and forgot to switch to a new card while making the payment. This time I just paid the bill and went around Internet removing that cancelled card.
I started using privacy.com for this reason. You can spin up a separate card number for each transaction type with its own limit (e.g. $100/month or $200). You can also just turn them off at will.
There are other services, though not as advanced. In Europe you could use Revolut to create virtual disposable cards. They are more useful for one-time payments however.
privacy.com looks great. I think the only disadvantage is that you lose all the 2-5% cashback, travel benefits and so on. I wish they could produce card while keeping these benefits but still its good card to have for shady websites.
I use privacy.com and my regular card. I use my privacy.com cards for sites where I think security is bad (like our local water company) and for recurring subscriptions on sites that I don't think will be easy to cancel.
It's a good compromise between protection and credit rewards.
Credit card companies and banks receive 1-3% of commission on all of the transactions made throught he card. Banks normally pass parts of these along to the consumer in the form of cashback or other benefits. Privacy.com just uses these commisions as funding for their service. (I've read it somewhere on their site)
Companies that make it difficult to unsubscribe should be penalised, I live in Europe and got the New York Times on a 12 month trial for €4 a month. Trial just ended and it's now €8 a month, only way to cance is to ring them, have tried once so far and was on hold for 20 mins before I hung up. There should be a law that if you can sign up online you can cancel online.
In France, Le Monde (most famous daily newspaper) requires you to send a paper mail (and not a regular mail, but a registered mail, which costs around 5-10€) to cancel your subscription. Even if you subscribed on the website, for a 100% online subscription.
It may not be followed in every country, but at least in Denmark the "forbrugerombudsmanden" slams down on things like that, I think that they recently sent out a message that online services should be able to be unsubscribed online as well.
Do people really have the same credit card number for that long? I feel like every year I end up with a new card for one reason or another and suddenly I have to track down all the places that can no longer process my payments.
I learned that you can request a replacement card with the same number, which I was initially very excited about. But when you get the new card it has a different expiration date, so it still needs to be updated most places.
There's a process for some card providers by which merchants can automatically update their card details for recurring purchases. Visa calls it Account Updater and at least Braintree has had support for it for over a decade.
Well that would be super convenient for me. At this point I'm just slowly transitioning to always using my checking account number directly for payment since that is stable.
The risk with that is you have no ability to contest a charge. With a credit card, you can contest and the card issuer will do a chargeback to return the funds.
In my (recent) experience, periodic charges are automatically applied to a new card, even if it has a new number. For your convenience, if you forgot to update your payment info...
Netflix US charged our new Citibank credit card at least 3 times based on a fraudulent purchase (somehow someone had made a Netflix account with our credit card number).
On top of that it wasn't even activated because we'd stopped using Citibank to simplify our accounting and just hadn't cancelled entirely yet. Backdoors exist apparently for recurring charges that roll over onto new cards for "customer convenience" because you wouldn't want to miss your bills and lose access to Netflix.
Amex is particularly good at these things. Not in the last place because they have actual humans answering the phone and fixing things. On the other hand, their fees are much higher than the others so you're paying for it as well.
You can but they won't stop charging your card. They have the credit card number, so the only way would be to change the payment method to an invalid card.
Another comment actually says that he managed to create a virtual credit card, change the payment method, and delete the card. Quite clever. It's a shame that methods like this have to be used instead of just the click of a button.
Can't you start issuing chargebacks? Chase is not the most Lawful Good of banks but I have to admit that on the times I needed someone to GTFO my credit card, they had my back.
In the EU you can ask your bank or credit card provider to block subscription payments from specific merchants. This is something EU requires them to support.
As for media companies with cheap offers and shady cancelation tactics, I discovered the following:
I send them a cancelation by eMail citing a german court ruling that states (roughly) "If you subscribe electronically, you must be able to unsubscribe electronically". I additionally cc one or two journalists writing about consumer issues (sometimes on cancelation oh joy) on the topics from that exact media.
Works every time.
And if you want to rub salt in the wound, request a detailed gdpr information about you and your account. gdpr even applies if it is not a european country based media company.
Only if there’s a clear link to the EU. Not refusing to sell to EU residents isn’t sufficient to show targeting—but offering Euro pricing or Swedish language options might be.
And at the end of the day, all law fits into the cross-section of jurisdiction and motivation. If you’re a Singaporean company offering global services, there’s no jurisdiction and (unless your activities are especially egregious) no prospect of motivation.
Which basically means that if the foreign company tries to collect, sends to an EU collection agency, .... they come in jurisdiction. So they can only bark but not bite.
If you want to say: This does not apply to a non EU citizen in an non EU country, you are correct.
But if you do business in the EU - i.e. have advertising from EU companies inside your media website or you are already dealing with the EU AND you have readers/users in the EU that pay for your service, it makes you instantly responsible for being GDPR compliant if you like it or not.
This is why some media companies block EU ip-address ranges not to fall into that "trap".
That's like saying American law doesn't apply to Russian citizens in Russia when it clearly does.
The court may struggle to apply it's judgements, especially if there isn't an applicable extradition situation, but all it takes is one representitive of the company to go to Europe and they are open to things like arrest for not following the judgement of the court
Only if you have no people or capital in the EU. If you were a small business that sounds correct, but every medium to large business I have worked at has had at least something important going on in europe (clients, suppliers, offices, etc).
Almost certainly false in practice. It would be shady bordering on illegal to detain a mere employee of a GDPR violator. Unless you are a famous employee of a big company that was egregiously flouting the GDPR but also had no other ties to the EU, then maybe you’d rethink your holiday plans.
I had a case with another company. They required a letter to cancel, so I sent an email. Got automated reply that they have received it and later an email that they required a letter. I sent back an email pointing to the law. After some weeks I got a claim from a debt collection agency. I sent the email history to the agency, it did take less than 1 hour before they answered that all claims where dropped since it wasn't a legal claim
Let them come after you. Just cancel the service in the same way you signed up (send an e-mail if you've signed up online), and then stop paying them (or block the direct debits, or reverse the credit card charges). I haven't had any company that actually bothered to send it to collections (or even sue me). Only once I got a mail that I hadn't payed, and when I replied with the cancellation e-mail attached, they said "oh, ok" and never bothered me again.
yeah, when i saw that i got so mad that I created a virtual credit card, changed the billing method, and then deleted the card. You can not imagine the big smile on my face when i received the email "we cannot charge you"....
I’ve been using this not only for subscriptions, but also when I’m making an online purchase at a store that I think may not have the best security in place.
Some credit card companies have card generators (Capital one has Eno, Amex has one I believe, Citi calls it Virtual Card Generator etc) but you can also use privacy.com, revolut and I think there's an app called token or something?
I think I pay for everything online with my privacy cards now. It's just easier to keep track of stuff when you get alerts after a company charges a closed card, or tries to charge you more than your card limit that you set up.
I tried that with rebel.ca (domain reg) a few years ago. They setup this dark pattern where domains wouldn't expire they get renewed two months before they were due.
In my case they froze the account preventing me from moving domains. I called support and they unfroze it. The next night the system it froze again. It became a race, manually moving 200 domains over in 12 hours. They don't allow bulk moves and you can't quickly open each domain for editing in a separate tab.
Fyi: Why move. There prices went up to some crazy amount $30 for a .org 60% more for[a .ca it ended up costing me hundreds extra one month. Glad I caught it...
> "In France, Le Monde (most famous daily newspaper) requires you to send a paper mail (and not a regular mail, but a registered mail, which costs around 5-10€) to cancel your subscription."
What is it with French companies? BlueCity, the UK arm of the French "Autolib" car sharing service, had this same ridiculous "send us a letter in the post to cancel" policy. Since they charged to a credit card rather than use direct debit like most UK companies would, you couldn't easily cancel the payments through your bank either.
Since I'm quite lazy I never got around to sending them the letter and the £5/month continued (and I did use the service, occasionally). Finally a few months ago they went out of business and the charges stopped.
There is a similar sounding provision in GDPR, which requires that it is as straightforward to withdraw consent as it is to grant it (i.e. it must be possible through the same procedure, so preventing postal letters being sent to a dedicated address). Not sure if there's a similar provision for cancelling paid services, but potentially if the service relies on consent for data processing, you could use GDPR grounds to force a cancellation through the same means you signed up.
It's worth a try, but GDPR specifically excludes contractual information. So if you have pending bills, whatever info they need to charge you is not protected by GDPR. And even after you pay, they still need your name for accounting purposes (you received $100 last year? from whom exactly? will the law ask, and you have to be able to answer)
I know only a law in germany where you have to be able to cancel your phone contracts with the same medium you accepted them... But I don't know anything about more broad laws.
That might be dangerous. At least in Germany there's a difference between the service agreement and the payment. As long as you don't cancel the service, if you are not paying you just amass more and more money that you owe them.
Exactly same issue a few years ago with The Times in the UK, with the ringing and very odd restricted availability hours, except they also said it was “technically impossible” to cancel without charging three more “monthly” charges.
I cancelled my card and somehow they managed to rescind access.
Also in Europe, I tried unsubscribing by SMS, and it seems to be pretty frustrating, I confirmed a few times I wanted to cancel and instead all I got was more questions and offers.
In the end I took the offer of 25 cents a week for a year, waiting to see how they'll charge my PayPal.
One reason I try to never give my card to lots of websites. If they have paypal, good. Or playstore subscription, sure. A one time/non recurring payment via a platform/provider/bank, ok.
But never the card. Reading such user horror stories, or Terms & Conditions, makes me turn around and never come back.
Paypal allows canceling subscription but they have hid this link deep inside. I don't know how well that even works. Also, Paypal payment protection is basically a joke. If you get dupped by someone and try to get refund through their payment protection, you get nothing no matter how right you are. That's my first hand experience.
After my kid was banned on Fortnite, I filed a bunch of paypal chargebacks on Epic Games for all the packs and extensions we bought, going back like 8 months. Got all of them back.
Not to say that Paypal won't screw you over, just that it doesn't do so all the time.
I never use PayPal as they still keep over thousand pound due some bullshit reason and don't want to release it. And it's pain to get to speak to a human. Currently, it's at the Financial Ombudsman
Always makes sense of having a separate card for online stuff (shop, subscriptions, etc). But having to go to the bank and renew, create a new one, the waiting lines.
Some banks have web/mobile banking where you can restrict actions/limits/transactions, so it's a good option too.
Others have virtual cards for this purpose, but these are not offered in a lot of countries (revolut, privacy, yandex money, etc).
I believe Visa has started working on requiring platforms "Provide customers with a digital or SMS cancellation method", though due to Covid it's been pushed back a year [1].
This sounds like a good and sensible step. It is a shame it has been pushed back due to Covid, as this is really not a particularly onerous requirement. Given how many companies are resorting to limited "service levels" as they have emptied their call centres and contact centres, it seems this should be expedited rather than delayed.
It would be interesting to see a credit card company differentiate on this. Have an internal team which works through the various companies (presumably in order of popularity) and does the leg work of figuring out how to subscribe. So the customer would be presented with: Go to these locations and upload this information. Or even: Enter your username and password and this information and our scripts will unsubscribe you.
When I was in Europe for a holiday I subscribed to Eurosport to watch the tennis. Unfortunately, when I returned to my country, due to geofencing, I could not access the relevant Eurosport site to cease the subscription... Fortunately it was via Paypal and I could achieve the same outcome by revoking the authority...
“Legally speaking, we can’t allow you to cancel via the app. You can only cancel via a web browser but unfortunately that system is down. Please mail a letter to PO Box 937192 or send a fax. We will process your cancellation with 4-6 weeks once we have the legally required paper request. Thank you for being a valued customer.”
“On display? I eventually had to go down to the cellar to find them.”
“That’s the display department.”
“With a flashlight.”
“Ah, well, the lights had probably gone.”
“So had the stairs.”
“But look, you found the notice, didn’t you?”
“Yes,” said Arthur, “yes I did. It was on display in the bottom of a locked filing cabinet stuck in a disused lavatory with a sign on the door saying ‘Beware of the Leopard.”
Tell your credit card company that it’s an unauthorized charge and request a new credit card. Some will even ship it expedited for free if you request it.
Maybe it's different based on how you signed up, or what kind of subscription you have, but for me at least there's a "cancel subscription" link when I go to manage my subscription online on this page: https://myaccount.nytimes.com/seg/subscription
I remember it didn't exist when I signed up a few years back, and they made a big deal about announcing that I could now cancel/change my subscription online when it launched.
I really like reading nytimes and have a digitial subscription since a year back (EU citizen) but wanted to cancel it to get away from the news cycles for a while, but now found out that there is no option to cancel other than calling a phone number.
The signup page mentions canceling subscriptions several times, which isn't false, but it isn't what you expect from a subscription-based page in 2020. This is in my opinion a dark pattern today. It probably would have been ok...20 years ago!
Same story with myself and NYT almost a decade ago. Keep an eye on your statements: they kept charging me and I kept needing to cancel for 3ish more months until it all finally stopped.
Yeah, Adobe did this to me, then I reminded them that they broke Dutch law by increasing my contract term by 1 year after a year (this can only be done automatically for a month), after talking to bosses of bosses of bosses they finally ended my subscription.
California has such a law, and at least on one website I changed my address from WA to California do it would show me the option to cancel directly on the website.
Yeah, agreed. I canceled my NYT subscription a while back in protest over some of their editorial misbehavior. It took me weeks to get in canceled and all my money back. Especially frustrating is that they dragged out the process and then charged me for the time that I was trying to unsubscribe. Eventually I just made American Express take the extra $2 back.
I want to resubscribe eventually, as they put out a lot of good journalism. But there is no way in hell I'm doing it until it's as easy to quit as to join.
One sort of workaround is to subscribe through Apple. Then cancelling is as simple as toggling your subscription to Off. As an added bonus, when you subscribe this way, you do not even have to give the NYT any of your contact info - Apple has it set-up so you can use randomized tokens to login. One of the many things I appreciate that Apple does.
Email them and say you want to cancel and state that you're deaf so you can't do it over the phone. They have to oblige because of the Americans with Disabilities Act.
Same with me. And somehow, their online costumer service was always unavailable... What a coincidence! Luckily, in my country there is a service that allows us to create temporary credit cards and I had subscribed with one. It was just a matter of canceling that card.
We need a law that requires it to be no more difficult to unsubscribe from anything then it is to subscribe to that thing. If you can subscribe with one click on the website then you must be able to unsubscribe with one click on the website. The law should make it individually actionable in small claims court for each subscriber that is inconvenienced to recover damages and not allow arbitration clauses to override that right.
This reminds me of my gym membership. They said I had to come in person to cancel it instead of by phone. So I cancelled my credit card naively thinking that my gym membership would be cancelled. After a few months I get letters and calls from a collection agency demanding the monthly payments and an additional late fee of $100
As someone fromnEurope, I was in the same boat as you with a NY Times trial subscription. I didn't even tried to call them, since they not only require you to call them to cancel your subscription, but do it during US east coast office hours too.
In the end I just canceled the recurring payment contract at PayPal. A few weeks later I received a 'Sorry to see you go' email from them and that was it.
I'm not sure if credit cards also allow you to cancel recurring payment contracts, but sepa directdebit does (which is the payment method used if you used for example the Dutch iDeal payment method as initial payment.
We have that law in California. A trick for non-californians is to change your address to a California one and sometimes the site will let you cancel. Depends if they use your shipping or billing address though.
It's so frustrating because my credit card declines the most random things. But when a service charges me twice in one week after I've been subscribed and charged the same amount once a month for years, the charge goes through and I have to go through hoops to get that money back.
And credit cards do this other obnoxious thing where they update merchants when you get a new credit card. It would be great if they didn't do that because then you'd remember that you are paying for certain services you never use because you'd get a payment declined email. But nah credit card companies just let those scumbag merchants continue their shadow charges under the guise of it being more convenient. Certain services like energy bills, phone bills. Sure, update the merchant with the new credit card. But a gym!? Gtfo with that trash.
I'd rather they update all of my merchants instead of assume that I want to cancel this or that. Citi has a nice feature that shows you all of your recurring charges. Maybe try to use a feature like that?
I also have it set up to send a text message to my phone any time my card is used.
> The credit card companies literally have no control over who can charge us.
That's not quite true. The card network can refuse a merchant for any reason, constantly making bogus charges would probably be a good reason for the network to refuse them and that's likely to be the result. Of course you don't see if your bogus charge was reflective of 0.01% of the charges from this merchant or 99.9%
However as I've explained on HN a few times there's an important distinction between two separate payment card processes: Authorization and Settlement.
Authorization is the one with PINs and online referral and even getting a call from your bank about "possible fraud". Authorization protects the bank from fraud by customers (you're a necessary evil to them) and merchants by automatically collecting evidence that both authorized this to happen. Once upon a time that meant taking an "impression" and a few merchants still do that, today it may mean redirecting customers to a half-arsed HTTPS site or an EMV PIN terminal.
Settlement moves money. The merchant tells the network that they want $85.26 from card #1234567890 and usually that will just result in them receiving $85.26
These two systems aren't tied together. If there are two authorizations against your card this week for $20.00 and $35.26 but also three settlements for $19.86, $209.42 and $20.00 respectively, it's likely no alarm bells go off, this is fine, you pay $249.28
One reason it is this way is that while Settlement is essential to the idea in the first place (if the merchants don't get money what's the point?), Authorization is dozens of extra things tacked on over time and so each has to be optional or the system would fail.
This means important safeguards in Authorization don't actually safeguard you, only your issuer (in your case Amex)
For example: Modern Authorization schemes are replay resistant. When you pay with an EMV card the merchant gets a one-time "cryptogram" that isn't reusable. Buying a $5 product, walking out of the store, then realising you needed two, so you go back and buy another $5 product results in two entirely different cryptograms for the two Authorizations. The store can't present a third Authorization because it would need a new cryptogram.
BUT Settlement isn't replay resistant. When (not if, this really happens) an IT mistake results in running all the Settlement for a merchant twice, customers just all get charged twice, again no flags are raised automatically, it will take until either somebody confesses their error or more likely angry customers start calling their issuers to complain.
For individuals the only advice is: Check your statements, demand that line items you can't explain be reversed, and try to pick an issuer who is on your side.
You obviously understand payment systems more deeply but to me this is like someone explaining why I need to deal with mainframes with tap drives in 2020. Many of us don't even need credit cards, we just need a way to transfer existing money from our bank account on agreed upon transactions safely. There are far more modern ways to electronically "agree" on a transaction then to use exact same 19 digit number for every single transaction for every single merchant everywhere. We need certainty for protection against frauds. Transactions should literally be instant but undoable change in bits in electronic databases without having these arcane settlements and authorization non-sense. Even if there are edge cases like offline merchant in Africa, credit card companies need to be able support all of below and there are exactly zero technical reasons why they cannot:
1. Consumer should always be able to blacklist a merchant or provide a whitelist
2. Consumer should always be able to set limit how much a given merchant can ever charge him/her and during what time windows
3. Consumer should always be able to set total limit of charges he/she wants to have at any time
4. Consumer should always be able to get phone number, mailing address and correct full legal name of any merchant who puts charge
5. Consumer should always be able to generate new electronic card number for online usage and dispose off any previous one at will
"Check your statements" is an useless advice. My experience is that even when you find out bad charge, you have to go through hoops and appeals which may take weeks or even months. There are zero guarantees same charge from same merchant won't happen again. The only single case when CC companies are willing to take off charge immediately is when you say you don't recognize merchant at all and its 100% fraudulent. If you say you once authorized that merchants a decade ago, its suddenly your fault and you are looking at writing up justifications which will likely get rejected any way.
I suppose what OP is saying is, if an innovative company figured out how to do those things, obviously using the technology/universe we already have, then they'd have him as a customer and/or investor. They'd have me too. These are all great consumer-focused features that would be game-changers for a credit card company.
It's simply utterly bananas that all it takes is for someone to get a few numbers from me, and then they have the ability to arbitrarily take my money, making it my problem to dispute it. This goes for credit cards and ACH transfers (which only require routing number and account number). The company who figures out how to fix this will have it made.
Isn't this what Venmo and Zelle are doing (sorry US perspective here)? The trick is to get companies to accept payments via those methods where the customer has control over the recurring payment.
This is why I use Paypal for recurring services when possible. One list of all the items, and you can cancel the payment there easily.
Dodgy companies like the New York Times even do offline transactions to successfully charge canceled cards. I was able to cancel it by changing payment to Paypal.
It's funny that you mention NYT and Paypal. I signed up to support, but upon finding out that they still show ads to subscribed users, I wanted to cancel. Turns out you have to call them simply to cancel your subscription, which is the worst dark pattern of all.
I just swapped my subscription to Paypal, then blocked it in paypal. They then spent the next month sending me 8 emails asking me to fix my payment, which I all sent to the spam folder. I'm not a big fan of paypal, but definitely having control over your recurring payments is the best feature.
I understand why card companies struggle to implement this while retaining good relations with merchants, but this does seem an opportunity for Stripe or similar.
You can "log into" a London TFL "account" that is effectively just your credit/debit card. That means that, at least in theory, Stripe could let you log in to a "shadow" account as a card holder.
I think the problem is that Stripe (and others) don't want to upset merchants by making it possible for people to cancel "fixed term" subscriptions, where the merchant claims the customer has entered a contract to pay for X months.
Agreed entirely though - I would really like to see privacy.com style "limited authentication value/merchant card numbers" take off more and become a "default". This has added privacy benefits too, as it means for anyone other than the CC issuer, it will become very difficult to link digital transactions.
The major credit card companies have a service where they can notify the merchant of the new details when the card expires. I believe Visa calls it Account Updater.
“ Apple Card has awesome features but the most important of them all, at leasts from a security standpoint, is probably the ability to generate virtual card numbers on demand, which will come in handy for those times when you won’t necessarily trust the recipient.”
BoA discontinued that service (ShopSafe) last year, and it had basically been abandoned for a few years before that since it required Flash and was never a part of their mobile app.
I really like it that my bank allows me to refuse payment, or just set the payment limit per company (I would set this to 0). Or I could just delete my virtual MasterCard altogether.
> Report your old card stolen, and renew the card.
As someone who shops online at a much wider diversity of vendors than amazon.com, My card actually gets compromised about once a year and needs its number changed. I don't mind the hassle because it forces me to update the payment method for my recurring charges. On more than one occasion when I re-evaluated whether I really still needed some random subscription, I decided that it wasn't worth it any more to me.
On that note, I'm amazed how many accounts with outstanding balances have been next to impossible to close out by simply sending a physical check to an address. On the phone, they insist, "If you'll just give us your new credit card number, we'll get this all taken care of now." I respond, "I'm not giving you my credit card number because I don't trust that you'll actually stop charging me. I'm happy to send you a check in the mail to pay off my balance." Then it's often, "Uhhhhh, I don't know how to do that. My computer program requires that I enter your credit card number in this field to process. Please just give me your credit card number and stop making my life so difficult."
By the time everything is said and done (and escalated), they always end up finding a way to accept a check in the mail.
If only that were the case... But actually there is a service Credit Card companies offer which will automatically update your number with merchants who charge you regularly.
There's a Brazilian credit card company that gives you a virtual credit card. You can generate as many new credit cards as you want, even multiple times a day, to use for online banking exclusively.
I think privacy.com does a similar service, but I loved to have this feature for no extra cost. I assume it also benefits the CC company a bunch with happy customers and less labor costs since people will be calling less for this kind of situation.
I'm always curious if deceptive actions like these are approved by an individual, a committee, or are perhaps a byproduct of unrelated tasks driven by lazy oversight shrouded by process.
Mastercard seems to be leading the way in fighting this type of behaviour. As of April 2019 they require notification at the end of free trials sending the customer a receipt and cancellation instructions. And Mastercard are looking into preventing recurring charges that you try to cancel.
It is Amex so I am surprised. They do not give a crap about the merchant only members (from what I have seen) and this is a good thing. Call again, tell them you do not authorize any charges from rhapsody.com ever again and be done with it. They should just sort it. I have never had a bad experience with them. Years ago My wife and I where at LAX getting on a flight to London then connecting to Dublin. At the airport my wife released she forgot her card. Called. Agent said, I see you have a charge at this hotel in Dublin, is that where you are staying？ Arrived in Dublin at the hotel around 12 hours later and there was an envelope with my wife’s new card.
I used their online form to void charge which requires me to write justifications. I wrote a paragraph of it explaining that I didn’t authorized that charge and that I can’t even contact Rhapsody, because of bad phone number they have put in Amex system. They have checkbox that requires me to say if I ever authorized merchant in the past and if it was a subscription. I had to say yes to that checkbox because I did had their subscription like 8 years ago. They then flatly and simply refused to void those charges without giving me any reason whatsoever or letting me know how do I even avoid the future charges. I then filed appeal where I threatened to cancel the card and after yet another month of “review” they finally voided it. My card is at “Gold” level, I pay close to $200 in membership fees and I easily qualify for their Platinum level according to their frequent spam. It’s most certainly not member oriented.
As an aside, when i top up my prepaid mobile i have the option to donate the top-up to another number. Yet dating sites i've seen don't allow subscribing someone else for a limited time (by opting-in on their side of course). Is there some reason as to why this is not an option on most dating sites? Seems courteous, but it might lead to scams or begging perhaps?
The insurance company I worked at operated on a similar principle. It was well known that older customers brought in a huge amount of profit because they tended not to claim, nor do they care about getting the best deal. So while younger customers were targeted with new deals and features, the older customers were left alone and would stay on "legacy" policies for decades sometimes.
Interestingly at some point they modelled what would happen if the premiums of the older customers was increased and they reckoned they could charge some customers double and they still wouldn't switch. This could have been used to offset price cuts for younger customers and generate much more profit overall, but it was decided to be unethical so they didn't follow the model.
I find insurance companies are always dangling discount offers they say will save you money if you have multiple policies. I eventually decided it was a big mistake, because if you have multiple, or all, your policies with one company, you're just advertising to them that you value convenience and simplicity over shopping around. So you may get a discount line item, but you will end up paying much more.
Our company did data mining for a large bank and we discovered that customer marketing where the bank initiates person-to-person contact with a customer makes people to change bank.
Customer marketing and reach out programs were net negatives. They lost more money than they did bring in by a large margin.
Experian pulled much the same shit on me. I hadn’t locked in in six months, so they disabled my account but kept charging me. A year or so I tried to sign in and it said my account had been disabled due to inactivity. Had to escalate it more than once before I got them to refund the whole thing.
Sounds like a fairly straightforward contested charge on grounds of failure to provide the service they were paid for? If you couldn't access it and were locked out, they can't claim they provided the service.
I actually helped create workflows like the for fitness clubs. If member had not worked out for 2 weeks, massive encouragement, we miss you etc.. more than 5 weeks... nothing..
I now a club once sent a simple questionaire to members who had not worked out in a long time.. just to gage why.. massive cancellations followed.
Yeah, sleepers make up a large if not a majority of many recurring revenues. I once worked at a very popular online service where I was in charge of the payments team. We had many ways to subscribe or upgrade, but to cancel it online was possible but very difficult. The cancel option was hidden under many clicks and dropdowns. That was mandated from C-level management even though we kept imploring to allow us to make it more obvious.
I think the majority instead contacted customer services to manually cancel it. Some also did a chargeback, which companies hate as it is expensive.
But in the end, there were so many sleepers that every time there was a plan to email all customers about an offer, or new service, it was always raised that it might make a lot of customers aware that they have the subscription, or check with their kids if they still need it, so sometimes the mailshots were filtered to active members, or just skipped all together etc. It was an uneasy balance of "don't touch", and never felt nice.
Last year I was contracted back to that company to help sunset the product I worked on years before, writing tools to notify and cancel all recurring payments. A huge chunk of customers was then sleepers that had not logged for 7-9 years. I do wonder how many were surprised when they got the cancellation email! :)
Just makes you realize how catastrophically bad our system serves us.
It's beyond insane how, in the USA at least, you give someone a string of numbers and they basically get pull access to your money for what might as well be perpetuity. And that you have to use to a specific bank, Paypal, Apple Pay, etc. to have a system as simple as a list of entities authorized to bill you in the future. And the ability to terminate those permissions.
Just think how well most people would be served financially if everyone was receiving phone notifications when they were recur-rebilled. "$15 to 24-Hour Fitness" popups up on their homescreen. And they could cancel the permission. Or at least just think "hmm, what's that for? Ah, right, I do want to continue being billed."
It takes a lot of mental gymnastics and charity to imagine how this system wasn't expressly designed by and for the enrichment of grifters.
This reminds me a case of a large publisher that was under a ISO 9001 certification project.
ISO 9001 requires to implement some kind of customer satisfaction feedback as to assess customer satisfaction for ongoing improvement.
When the ISO auditors/consultants said that they should do something about it such as sending surveys to subscribers to assess their satisfaction, the Sales & Marketing VP said that if ISO 9001 meant that they had to remind subscribers that they had a subscription they do not use, they would rather cancel the ISO 9001 certification project altogether.
This is also the reason I almost never sign up for yearly plans. I'm much more likely to unsubscribe from something I don't use if I see the credit card charge monthly.
Recurring billing is basically a scheme, at least in the journalism / entertainment world, to get customers to pay for goods and services they don't use, with the hope that they either won't notice or go through the effort that they're being charged. Recurring billing services have gone to efforts to acquire the new information from credit card companies whenever a card is updated to maintain the flow of money. I used to work for a publisher, and the introduction of recurring billing cut our cancellations for both periodical sales AND ad sales to local businesses by over 80%.
I worked on a dating site briefly and saw exactly this. iirc, something like 20% of their customer base fell into this state. It was one of many things that convinced me that space was ugly.
Be careful, exactly 10 years after I cancelled my Netflix, Netflix started to charge my card again. I contacted Netflix, but they cannot did anything about it. I ended up having my card issuer to issue a new account number to me.
If you don't follow you finances and continue to pay Netflix for a year of service without use, I personally don't think they have any obligation to cancel your account. As somebody who has run SaaS services and seen countless baseless e-mails (even worse chargebacks) come in from users who "forgot" to cancel service and then were irate about it, this doesn't help the customer "entitlement" problem I see. Let me explain what I mean in terms of customer "entitlement". A few of my friends will go out of their way to call and complain to companies for mistakes they themselve make, demanding refunds, discounts, reward points, and often they get compensation. As a business owner, this sort of behavior really infuriates me. These types of users are taking advantage of situations because of their own failing, and thus are now blaming the companies expecting something in return.
Maybe this is why it makes financially sense to automatically cancel forgotten accounts at some point.
You would avoid some of the support costs, some chargeback costs and cost with negative publicity (people complaining about ”fraudulent” charges on social media).
On large enough scale you can likely do some calculations and eventually A/B testing to figure out what does this mean financially.
I cancelled my Netflix account after almost never watching it and now they keep sending me emails to reactivate my subscription for the low low price of 7.99 euro a month. For some reason they think that I want to come back to Netflix to watch shows at standard definition since for 7.99 you can't even get 720p, even though when I was subscribed, I had the 4K plan.
That's just to reel you in. You might think that they discounted their UHD offering for you. So you check and Netflix got their email engagement click.
I don’t understand how people leave subscription or renewal charges unchecked in their credit cards. I can understand keeping a subscription unused but still acknowledging and paying for it (for whatever personal reasons), but having a charge in your credit card without knowing what exactly it is or why, sounds a bit strange to me. Could be that I’m not rich enough and I’m still paying attention to every single €/$/£ being charged :-)
I'd prefer my bank to allow me to manually approve every payment, e.g. via smartphone application. It would be easy to understand, fast enough, with some options like "approve netflix forever". That would be ideal for me. And if I don't like this particular payment, just decline and move on.
Those agents who pull my money without my explicit consent every time are the reason I'm keeping my card with minimal amount of money (I don't use credit cards, only debt cards).
You're describing something called direct debit (https://en.wikipedia.org/wiki/Direct_debit). In the US, you may know it as ACH, but the american version of direct debit is a far cry from EU direct debits.
When setting up a DD, you can give a european company your IBAN. They will be able to make withdrawal requests, directly to your bank account. Your bank will usually give you full control on what you can do with those. For example, my bank Bunq (https://bunq.me/) allows me to accept once, or automatically accept any debit request up to whatever amount I choose per period from that same merchant.
Direct Debits are free. You bypass credit card fees (which in Europe are much lower than in the US in the first place but still percentage-based). They are also usually real-time (though slower than the credit card network, and depending on banks and fraud checks there can be latency of up to a couple of days).
There's a huge inequality between those who understand finance and those who don't. You don't get rich just by working hard. You have to understand money to get ahead. But many people are essentially afraid of money.
It is not just ”altruistic”. The idea is clever: they loose <0.1% inactive users but will win new ones blocked now behind worry ”what if I will not really use it”. Their bet is that the second group could be larger than first, and by order of magnitude. And if not, then it is still not so expensive marketing. I wish ’use only if you really use’ would become norm.
> I wish ’use only if you really use’ would become norm.
I wouldn't look at them as an shining beacon. They only cancel if you haven't watched it for a year, and none of your money is refunded, so it's not that great of safety net.
It is still pretty great. A lot of people would happily exchange one year of fees for having to unsubscribe. Think of the application for the deceased or incapacitated. Running down every subscription a deceased parent could have had is a huge pain.
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[ 1.8 ms ] story [ 338 ms ] thread> Netflix said less than half a percent of its user-base falls into that category.
> Almost 16 million people created accounts in the first three months of the year, nearly double the new sign-ups it saw in the final months of 2019.
I feel like they are doing the minimum change necessary to try to reduce legal problems. They have actually probably had a lot of people try to sue them for charging them for a service they have not used for months and months, when they forget about it and then notice the charges.
No doubt the quarantine was a solid motivator to sign up.
In fact, if I try to login with the email address I used for the trial and any random thing for the password, it goes to the new user trial setup.
If I hit thee "need help" link on the sign in screen and try to initiate a password reset, it tells me there is no account for my email address.
I routinely cancel subscriptions for S3stat customers who have forgotten which old employee first signed up for the service, or just don’t want to bother logging back in to do so. A name, or even company name is plenty.
Shouldn't be the case for a big company, but a smaller one- man startup could easily make this mistake and not be scummy.
If you want to do it, set it up so all charges must result in 24-hour notification to customer and option to cancel future charges.
This whole reaction makes me understand why California has all these backwards-ass propositions. Everyone just wants to make any damned random thing a law.
In most cases I bet they get paid - usually whoever is overseeing a loved ones estate really doesn't want to be going to court etc.
I don't want to name the company, because the dispute is still ongoing.
Maybe notifying customers gets them to reactivate, maybe if they resubscribe later they can charge more, maybe it’s better for financial reporting and projecting subscriber counts.
On the other hand it could just be a rare moment of a company doing right by the customer.
I bet you're right.
They sent me an email that they weren't going to charge me because I hadn't used it, but I was free to sign up in the future if I decided I wanted it.
It was so refreshing, it made me a lifelong customer.
I don't think this was a cynical marketing ploy designed from the top down either, it was a very natural thing for the company to be customer obsessed and trying to do right by them.
It's trying to do right by the legal and finance departments, not by the customers. Going after someone for anything less than a mid to high five figure AWS bill is never worth it because the legal costs are astronomical, the defendant probably can't pay in the end, and the cost of defending will drain the customer of any more resources that could have been spent on the cloud.
It's the cost of doing business. The choice is between trying to bleed a rock or a safe bet that LTV will be higher than the marginal cost.
I seem to sign up every year or so, spend my credits, and cancel. They keep offering it though, and now I'm considering buying (as I enjoy the medium, turns out), so I suppose it worked.
Then I realized it and thought to myself — nevermind, I have the credits, I'll eventually use them up.
Nope. There is a credit cap and after you reach it they'll happily charge you without providing any service.
Personally, I consider this to be a dark pattern and it makes me reluctant to sign up for any trial or even subscription services in general. I'm glad that Amazon is upfront about it but would prefer that they didn't do this at all.
What's sketchy is that Amazon's Audible deletes all your unused book credits if you unsubscribe. If you don't know what to buy with those credits and you want to unsubscribe, you face the decision to keep buying credits, or lose the credits you already paid for.
Fortunately, there are a couple of workarounds. There's the option to pause your subscription for 3 months, or you can buy a book, cancel the subscription, then return the book to recapture the credit once you find a book you actually want to read.
Their Prime subscription was a pain to cancel in Belgium. I found it on the German site, even though I always use English and there for the English site.
They also use dark patterns for it, unsubscribing is very confusing.
You can't do anything on the Amazon store without being goaded into signing up for Prime and having to triple check what you are clicking on during checkout to make sure you don't sign up by mistake.
My wife already has a Netflix subscription despite Amazon's attempts to hook her on Prime (I'll take credit for stopping that). After this this news it seems it was definitely the correct choice.
(Also netflix would have to report all those unsubscribes to shareholders, but this way no one cancels and they're framing it positively as consumer-friendly).
So if netflix incentives people to people keep their accounts, they remove the friction from what would otherwise be a high-friction resubscribe.
As long as netflix believes they can get people to come back for an occasional exclusive content hit-show, then they can reactivate the payments for a while.
As it grows, that hits the pnl anyway so from an earnings perspective it doesn’t matter too much. Couple that with the cost of customer service calls etc. + the inactive customer count + the goodwill and the decision seems rational
For example, often you hear angry customer who is like "can you refund me, I didn't use it this month, you can check your records"
Then request is passed on to some other employee who confirms that they really didn't use their account.
After that you issue refund.
In most cases, you end up issuing refund either way while in some cases customer forgets but he doesn't forget he got charged. So it counts towards negative experience even if a customer didn't complain about it.
If your company is here for long term then every negative experience matters.
Netflix is vastly bigger, granted, so who knows what machinations are afoot for them. But it is certainly believable to me that a company could choose to do something explicitly anti-greedy.
I'm pretty sure that's just the absurd HN take on the "duty of loyalty", not an actual fact.
Also, if you absolutely need a pessimistic reason, I imagine it would avoid headaches with customers complaining (regardless of who's right).
There ARE industries that survive on the, "One loud sign-up multiple silent payment extractions," model; everyone hates them and they have to ju~st skirt regulations to get by ("I'm sorry, we didn't receive your cancellation, please fax it with proof of necessity, last month's payment is still due.").
This same dynamic plays out with any service that sells you long-term self-improvement but is burdensome to use. Exercise tracking apps, diet tracking apps, health-conscious meal kits, subscription lessons for music or foreign languages, etc. There are shadier examples for sure, but it’s not always cut-and-dry evil.
Honestly I could see this being an honesty test class action at some point.
see the references in this post:
https://news.ycombinator.com/item?id=16171149
(The reason is that the courts don't want to get involved in the minutae of running private companies. They'd rather you just update your company bylaws.)
However, shareholders, or most famously private equity (PE) companies, may pressure mgmt. to adopt certain policies and goals, and use their voting shares to encourage or even enforce that.
The standard, from In Re Walt Disney, is that business decisions aren’t reviewable unless “the exchange was so one-sided that no business person of ordinary, sound judgment could conclude that the corporation has received adequate consideration".
In, Shlensky v. Wrigley, the Chicago Cubs’ were sued for refusing to install lighting for nighttime games: their president believed baseball was best as “a daytime sport." This is absurdly nebulous (and kind of bizarre), but the Cubs nevertheless won.
That decision was based on Davis v. Louisville Gas and Electric Co, which says “the directors are chosen to pass upon such questions and their judgment unless shown to be tainted with fraud is accepted as final. The judgment the directors of the corporation enjoys the benefit of a presumption that it was formed in good faith, and was designed to promote the best interests of the corporation they serve.”
It is probably true that this policy earns Netflix some intangible goodwill. It might plausibly make them more money. However, even if it didn't, it would still be within its rights to implement such a policy.
Props to Netflix for unsubscribing users who don't use the service.
When I hear sob stories about how #{big_number}% of people can't afford an unexpected $500 bill, I'd love to know how many of those people would easily have $500 in savings if they cancelled all their unused subscriptions and stopped buying a new smartphone every year.
[Edited]
With economic gap between poor and richer, it is quite easy for one segment not to worry about subscriptions and for another to not have money.
Anecdotally, programmers and other well paid people I know areally waaay more likely to buy subscriptions then people I know who don't have money.
The people who buy new phone every year are also incredibly rate among those I know - not even rich people do it.
This is sort of like the fact that strict border controls encourage undocumented immigrants to stay once they've passed the border once.
Many people give money to ensure that a service is available when they need it.
Netflix, as a service, takes ~10 minutes to set up. This might be the case for a software suite like CC, where you might need to download a massive amount of data, or other software where you pay annually or enter into some kind of contract, but Netflix is strictly monthly and easy to sign up for by design.
I also run a business designed to be used in the moment when an author is struck with inspiration. It takes less than a minute to upgrade or downgrade (and some users choose to only upgrade for hours at a time each month with no penalty, aka a month of subscription time sometimes lasts a full year), but when I experimented with automatic downgrades to those who hadn't signed in all month I got complaints that they "weren't able to just log in and use the service they paid for".
Could just be a notice thing (improving messaging to more reliably let users know they've been downgraded), an option (letting users opt-in/out of automatic downgrading), or have other solutions (maybe refunding instead of downgrading?), but it does seem that at least some users like to feel like they're paying for something to be "at their fingertips" when they need it.
That seems like the right way to go.
Not saying they can't occasionally make altruistic decisions like this, just that more people's interests are being weighed.
[0]https://en.wikipedia.org/wiki/Creating_shared_value
I think it's become common because the average public company CEO tenure has fallen by 50% over the same period that their compensation has gone up 10x. Now it's in their strong interest to juice the quarterly numbers and not worry about anything particularly long term, because that's going to be the problem of some other sucker. And similar incentives apply all down the executive hierarchy. The faster people move around, the easier it is to make bonus-related metrics go up even if it harms things a few years down the line.
The move is also brilliant in two ways: 1. More Netflixsters will realize now and start watching again. 2. Netflix is getting a lot of free publicity.
The Combined value of these two is worth far more to Netflix than whatever pennies in revenue they’ll lose.
“Doing the right thing” and “managing reputation risk” are often indistinguishable. The details of Machiavellian self-interest can be difficult to codify, so a semi-sincere effort to do the right thing can be safer.
It could be canny business sense.
It could be both.
in a similar vein, Ikea umbrellas are discounted when it rains.
Ever see a person who was just really great to everyone and the world seems to have rewarded them for it? That doesn’t always happen but sometimes it does.
If Netflix can successfully normalize "only charge me if I use the service" into a basic consumer expectation for subscription businesses it might cost Netflix a little, but it might cost their competitors a lot more.
By putting a policy in place like this they're internally much more incentivised to ensure they are putting out consistently good content.
Their action both removes a problem on their side and is good for customers. Win-win. So probably not entirely altruistic (nothing is), but at least partly.
My favourite is Gusto. Why is Gusto so good? I only use it twice a year or so, the guy buying it isn't the guy using it, and the principal value in their business is integrations not UX. Well, Gusto is good because they want to be good. I'm happy with that explanation.
Arguably, doing right by the customer is selfish because it looks out for you business in the long term.
No wonder "no contract" chains are growing in some countries.
Less BS for the consumer, even if they have to "pay more" (i.e. the actual cost of the service).
(But yeah in the case where you actually want to pay for a gym membership and not go, those seem optimized for it)
But that's why it only more interesting. We all are sadly accustomed that selling subscriptions you would never is the business model of most gyms. But then, what would be the reason for Netflix not to do this? This is really weird, I don't believe they would do this just to be good guys, and I don't see what can be the reason for them to do that otherwise.
Disappointed after reading the article. TLDR : they cancel your subscription after 1 year of inactivity
If your credit card expires, many subscription providers will get the updated details automatically.
Here’s an article with some details on the topic: https://www.creditcards.com/credit-card-news/card-updater-se...
Probably a related thing where they want to keep receiving revenue from me without interruption to my service, but ultimately need to confirm it's not fraud?
Less than half a percent isn't that much relatively, but those are still many millions.
It'd be hard to convince me that they did it because they're nice, they have share holders who are not interested in that stuff.
So what could have pressured them to do this? Regulation?
100%. It might have something to do with wanting more clear/precise analytics numbers. Non-active members might weigh down certain metrics in some way, so removing these members likely allows for 'fuller' analytics/measurements, which is important to their core business. Netflix is now also a very active producer of content itself, instead of it's previous business model of licensing/'renting out' others' content, so clearer and probably higher engagement metrics (once non-active memberships are removed) helps one of it's core competences.
It's purely a business move. Their blog post is PR.
I can't blame them for trying, but it's definitely not a good time to be running a gym.
(Not that I've ever seen a site on which there was an obvious way to bring the consent popup back up after it was closed, but hopefully one day data protection authorities will unclog their pipes and the fines will start flying.)
https://www.cnet.com/news/companies-must-let-customers-cance...
The best way to handle Xbox payments is to buy pre-paid codes in the store and use them (assuming that's an option where you live).
Personally, I use cash for day-to-day transactions, credit if I want the third-party record or it is a larger transaction. I never use debit because the protections are stacked against the user, and CC cash back schemes refund a portion of the credit card cartel tax. So not using it except at the bank ATM means I don't have to worry about the number being abused, unless my bank's ATMs are compromised.
not much cognitive load or anything (i disabled sound for these and just check em once a day) and very hard to miss any transactions you didn’t really authorize
Is there any risk they'd sue you? Or other auto renew services, what do you, or others, think — do they sometimes sue their customers whose credit card expired?
That sounds annoying b.t.w., having to call them etc.
You need write an email with order date, current billing cycle, reference number and more.
All the while there you can manage parts of your subscription through a portal. They just try to make cancellation as laborious as possible.
"Hello sir, this is (collections agency). Can you confirm your address, please?" "No." "I'll have to end the call then." "Okay."
I would feel awful if I caved in and paid money I don't owe just because a company told me to.
And those agencies are very happy to assist, since they get a % for their work, and when the money is big. Most of they time it's very productive. Letters and calls are just the first step. A debt of 300$ can get to x000 pretty fast (debt, fees, lawyers). And then they go to court, put financial blocking on your assets, there is a judiciary person in charge of evaluating your assets, bank accounts, they can even freeze your debt from your bank accounts if you are refusing to pay a legal debt.
If you are abroad they will happily wait for you when you will get back, or get in touch via one of their foreign agency and let you know they are near.
If they would really want to get you in trouble they can inform the foreign local authorities about your problems, so depending on the case they can create problems for you.
https://www.westminster.gov.uk/ebooks-emagazines-and-audiobo...
Have to admit RBDigital ain't the best reading experience but good enough to read The week and The Economist for free :)
I even have PressReader access so many magazines to read :))
I do think a $1 trial is incongruent with their overall pricing.
https://www.vice.com/en_us/article/z43qx9/how-to-cancel-recu...
But it's not quite clear unfortunately how much protection they actually offer. A bad player could still try to enforce some hidden EULA small print that claims to empower them to ignore the cancellation and send bills the old fashioned way after cancellation on the intermediary. I really don't know if Apple or Google are taking effective steps against schemes like that or if they have just been lucky so far that those scammers are still finding enough prey outside of the walled gardens.
(ps: re-reading this comment I find myself sounding more critical than intended, actually I love subscribing through that kind of intermediary, I'd even consider paying extra. I'm just afraid that the protection offered might not be quite as strong as it seems)
What are the reasons you feel safe? (Then maybe I could try this me too)
If your rent autobill fails, I think everyone realizes it doesn't mean you don't have to pay. If the credit card for your gym membership expires, I think most people would likewise fear (and has been known to happen) that your bill would eventually be sent to collections. A $5/mo subscription? Not worth the time of the company to try to collect. A Salesforce or Adobe subscription on a card? I certainly wouldn't gamble on that, and would try to properly cancel the subscription.
That's not a subscription, that's metered billing, where you are billed for what you have already used.
Excuse me? If the bill is prepaid you bet your ass it means the subscription is cancelled. You can't pay, they don't continue to provide the service, end of story.
> If your rent autobill fails, I think everyone realizes it doesn't mean you don't have to pay.
The difference is that rent is paid after the fact and is typically part of a lease contract. What contract are you signing to get Netflix?
> A $5/mo subscription? Not worth the time of the company to try to collect.
Who's out here providing $5/month post-paid subscriptions? I have literally never heard of such a thing. Metered billing is a different story, but the discussion is lawsuits over Netflix subscriptions.
Actually when I asked, I had in mind subscriptions in general, not Netflix in particular
Netflix subscriptions are prepaid. What on earth would give them the idea to sue if your card is declined?
If your current month runs out and your renewal is declined, they just don't authorize you for a second month of service. There's no breach of contract, there's no debt for services rendered, I can't think of a single motivation to sue for this.
What am I missing here?
The latter would be fraud.
What seems more likely is that they would blacklist you if you're obnoxious.
If anyone at stripe is reading this, I think this is golden opportunity for consumer focused payment service. One should be at least able to block a merchant from charging my card. I can do that for spammer email but can't do that for spam charge on my card - in 2020!
Got charged some 40 Euro a year later. I was shocked. My first thought was a compromised card. But immediately afterwards I received invoice from VPS provider. I called the bank and asked them how did that happen. They said it's possible. Lucky for me the provider immediately reversed the charge.
The thing is I had cancelled that Amex card almost a year before that charge had happened. It was still charged! I was baffled. Coming from a country where literally every credit card payment has to be authorised via an OTP or password (since as long as I can remember) it was a whole new world for me.
Well, that cancelled card was charged again (almost a year after I had the last experience) when I shopped at AliExpress and forgot to switch to a new card while making the payment. This time I just paid the bill and went around Internet removing that cancelled card.
India did not have the OTP option, RBI made it mandatory to prevent fraud.
privacy.com seems like such a sleek solution.
It's a good compromise between protection and credit rewards.
On the other hand I cancelled and re-enabled netflix a number of times. I’m currently subscribed and happy that I can change it anytime.
I believe the wording to be something like it has to be possible to cancel in a similar way you signed up.
In France, Le Monde (most famous daily newspaper) requires you to send a paper mail (and not a regular mail, but a registered mail, which costs around 5-10€) to cancel your subscription. Even if you subscribed on the website, for a 100% online subscription.
It's really shady.
I learned that you can request a replacement card with the same number, which I was initially very excited about. But when you get the new card it has a different expiration date, so it still needs to be updated most places.
On top of that it wasn't even activated because we'd stopped using Citibank to simplify our accounting and just hadn't cancelled entirely yet. Backdoors exist apparently for recurring charges that roll over onto new cards for "customer convenience" because you wouldn't want to miss your bills and lose access to Netflix.
"Hi, these are unauthorised, fraudulent transactions, please revert them and block future charges from that merchant"
That's all it takes with Amex and most others AFAICT.
Another comment actually says that he managed to create a virtual credit card, change the payment method, and delete the card. Quite clever. It's a shame that methods like this have to be used instead of just the click of a button.
Report the transactions as fraudulent, they'll soon stop.
Works every time.
And if you want to rub salt in the wound, request a detailed gdpr information about you and your account. gdpr even applies if it is not a european country based media company.
And at the end of the day, all law fits into the cross-section of jurisdiction and motivation. If you’re a Singaporean company offering global services, there’s no jurisdiction and (unless your activities are especially egregious) no prospect of motivation.
But if you do business in the EU - i.e. have advertising from EU companies inside your media website or you are already dealing with the EU AND you have readers/users in the EU that pay for your service, it makes you instantly responsible for being GDPR compliant if you like it or not.
This is why some media companies block EU ip-address ranges not to fall into that "trap".
Yes, that’s exactly what I said. I’m confused about what you’re think you’re clarifying.
The court may struggle to apply it's judgements, especially if there isn't an applicable extradition situation, but all it takes is one representitive of the company to go to Europe and they are open to things like arrest for not following the judgement of the court
They stopped last year after I wrote to them I considered I didn't own anything (a human probably read the file and dropped it).
Reaaaaaally big smile on my face
I’ve been using this not only for subscriptions, but also when I’m making an online purchase at a store that I think may not have the best security in place.
https://www.bankofamerica.com/security-center/accounts-cards...
I think I pay for everything online with my privacy cards now. It's just easier to keep track of stuff when you get alerts after a company charges a closed card, or tries to charge you more than your card limit that you set up.
In my case they froze the account preventing me from moving domains. I called support and they unfroze it. The next night the system it froze again. It became a race, manually moving 200 domains over in 12 hours. They don't allow bulk moves and you can't quickly open each domain for editing in a separate tab.
Fyi: Why move. There prices went up to some crazy amount $30 for a .org 60% more for[a .ca it ended up costing me hundreds extra one month. Glad I caught it...
What is it with French companies? BlueCity, the UK arm of the French "Autolib" car sharing service, had this same ridiculous "send us a letter in the post to cancel" policy. Since they charged to a credit card rather than use direct debit like most UK companies would, you couldn't easily cancel the payments through your bank either.
Since I'm quite lazy I never got around to sending them the letter and the £5/month continued (and I did use the service, occasionally). Finally a few months ago they went out of business and the charges stopped.
If you’re struggling to cancel a subscription, contact your bank and ask them to block the subscription.
I cancelled my card and somehow they managed to rescind access.
In the end I took the offer of 25 cents a week for a year, waiting to see how they'll charge my PayPal.
But never the card. Reading such user horror stories, or Terms & Conditions, makes me turn around and never come back.
Not to say that Paypal won't screw you over, just that it doesn't do so all the time.
Relatively few monthly statements on it make anything funny stand out, and it's easy to just report/cancel the card.
Some banks have web/mobile banking where you can restrict actions/limits/transactions, so it's a good option too.
Others have virtual cards for this purpose, but these are not offered in a lot of countries (revolut, privacy, yandex money, etc).
You apply for the card online and get it in the post.
1. https://support.stripe.com/questions/2020-visa-trial-subscri...
“On display? I eventually had to go down to the cellar to find them.”
“That’s the display department.”
“With a flashlight.”
“Ah, well, the lights had probably gone.”
“So had the stairs.”
“But look, you found the notice, didn’t you?”
“Yes,” said Arthur, “yes I did. It was on display in the bottom of a locked filing cabinet stuck in a disused lavatory with a sign on the door saying ‘Beware of the Leopard.”
Depending on the law if your jurisdiction, an email may be enough. Then cancel any future charges on your CC.
IANAL. IANYL.
I remember it didn't exist when I signed up a few years back, and they made a big deal about announcing that I could now cancel/change my subscription online when it launched.
Also, I live in California.
Washington Post gives you upfront yearly billing and cancellation is a few clicks, and I am a happy paying customer for them.
The signup page mentions canceling subscriptions several times, which isn't false, but it isn't what you expect from a subscription-based page in 2020. This is in my opinion a dark pattern today. It probably would have been ok...20 years ago!
Ironically they even shed light on these things a few years back, warning about different patterns: https://www.nytimes.com/2016/05/15/technology/personaltech/w...
Shady, shady.
I want to resubscribe eventually, as they put out a lot of good journalism. But there is no way in hell I'm doing it until it's as easy to quit as to join.
In the end I just canceled the recurring payment contract at PayPal. A few weeks later I received a 'Sorry to see you go' email from them and that was it.
I'm not sure if credit cards also allow you to cancel recurring payment contracts, but sepa directdebit does (which is the payment method used if you used for example the Dutch iDeal payment method as initial payment.
And credit cards do this other obnoxious thing where they update merchants when you get a new credit card. It would be great if they didn't do that because then you'd remember that you are paying for certain services you never use because you'd get a payment declined email. But nah credit card companies just let those scumbag merchants continue their shadow charges under the guise of it being more convenient. Certain services like energy bills, phone bills. Sure, update the merchant with the new credit card. But a gym!? Gtfo with that trash.
I also have it set up to send a text message to my phone any time my card is used.
Give every merchant an individual card and kill the card when they won't stop charging you.
P. S. There's also a browser extension that will let you generate a card at the time of checkout and autofill the information.
Also, really, a throwaway account to post a referral link?
That's not quite true. The card network can refuse a merchant for any reason, constantly making bogus charges would probably be a good reason for the network to refuse them and that's likely to be the result. Of course you don't see if your bogus charge was reflective of 0.01% of the charges from this merchant or 99.9%
However as I've explained on HN a few times there's an important distinction between two separate payment card processes: Authorization and Settlement.
Authorization is the one with PINs and online referral and even getting a call from your bank about "possible fraud". Authorization protects the bank from fraud by customers (you're a necessary evil to them) and merchants by automatically collecting evidence that both authorized this to happen. Once upon a time that meant taking an "impression" and a few merchants still do that, today it may mean redirecting customers to a half-arsed HTTPS site or an EMV PIN terminal.
Settlement moves money. The merchant tells the network that they want $85.26 from card #1234567890 and usually that will just result in them receiving $85.26
These two systems aren't tied together. If there are two authorizations against your card this week for $20.00 and $35.26 but also three settlements for $19.86, $209.42 and $20.00 respectively, it's likely no alarm bells go off, this is fine, you pay $249.28
One reason it is this way is that while Settlement is essential to the idea in the first place (if the merchants don't get money what's the point?), Authorization is dozens of extra things tacked on over time and so each has to be optional or the system would fail.
This means important safeguards in Authorization don't actually safeguard you, only your issuer (in your case Amex)
For example: Modern Authorization schemes are replay resistant. When you pay with an EMV card the merchant gets a one-time "cryptogram" that isn't reusable. Buying a $5 product, walking out of the store, then realising you needed two, so you go back and buy another $5 product results in two entirely different cryptograms for the two Authorizations. The store can't present a third Authorization because it would need a new cryptogram.
BUT Settlement isn't replay resistant. When (not if, this really happens) an IT mistake results in running all the Settlement for a merchant twice, customers just all get charged twice, again no flags are raised automatically, it will take until either somebody confesses their error or more likely angry customers start calling their issuers to complain.
For individuals the only advice is: Check your statements, demand that line items you can't explain be reversed, and try to pick an issuer who is on your side.
1. Consumer should always be able to blacklist a merchant or provide a whitelist
2. Consumer should always be able to set limit how much a given merchant can ever charge him/her and during what time windows
3. Consumer should always be able to set total limit of charges he/she wants to have at any time
4. Consumer should always be able to get phone number, mailing address and correct full legal name of any merchant who puts charge
5. Consumer should always be able to generate new electronic card number for online usage and dispose off any previous one at will
"Check your statements" is an useless advice. My experience is that even when you find out bad charge, you have to go through hoops and appeals which may take weeks or even months. There are zero guarantees same charge from same merchant won't happen again. The only single case when CC companies are willing to take off charge immediately is when you say you don't recognize merchant at all and its 100% fraudulent. If you say you once authorized that merchants a decade ago, its suddenly your fault and you are looking at writing up justifications which will likely get rejected any way.
You're telling me how you think the universe ought to be but my advice was about how the universe is.
It's simply utterly bananas that all it takes is for someone to get a few numbers from me, and then they have the ability to arbitrarily take my money, making it my problem to dispute it. This goes for credit cards and ACH transfers (which only require routing number and account number). The company who figures out how to fix this will have it made.
To what extent they "have it made" is an open question, but I am curious what you have to say about their signup process.
Dodgy companies like the New York Times even do offline transactions to successfully charge canceled cards. I was able to cancel it by changing payment to Paypal.
I just swapped my subscription to Paypal, then blocked it in paypal. They then spent the next month sending me 8 emails asking me to fix my payment, which I all sent to the spam folder. I'm not a big fan of paypal, but definitely having control over your recurring payments is the best feature.
You can "log into" a London TFL "account" that is effectively just your credit/debit card. That means that, at least in theory, Stripe could let you log in to a "shadow" account as a card holder.
I think the problem is that Stripe (and others) don't want to upset merchants by making it possible for people to cancel "fixed term" subscriptions, where the merchant claims the customer has entered a contract to pay for X months.
Agreed entirely though - I would really like to see privacy.com style "limited authentication value/merchant card numbers" take off more and become a "default". This has added privacy benefits too, as it means for anyone other than the CC issuer, it will become very difficult to link digital transactions.
https://articles.braintreepayments.com/guides/account-update...
1. Citibank did this for a long time. They still might. I remember using this in the late 2000s for some online services at the time.
2. Apple and Google Pay both do this as well, though these are all one-time-use implementations.
It's sold as this pretty revolutionary feature that others have done (in some capacity) for quite a while now.
Apple didn't invent virtual numbers, but they have a better implementation than Citibank. It's Apple's MO.
We need to be empowered against these practices.
Btw, Very nice of Netflix to do this!
As someone who shops online at a much wider diversity of vendors than amazon.com, My card actually gets compromised about once a year and needs its number changed. I don't mind the hassle because it forces me to update the payment method for my recurring charges. On more than one occasion when I re-evaluated whether I really still needed some random subscription, I decided that it wasn't worth it any more to me.
On that note, I'm amazed how many accounts with outstanding balances have been next to impossible to close out by simply sending a physical check to an address. On the phone, they insist, "If you'll just give us your new credit card number, we'll get this all taken care of now." I respond, "I'm not giving you my credit card number because I don't trust that you'll actually stop charging me. I'm happy to send you a check in the mail to pay off my balance." Then it's often, "Uhhhhh, I don't know how to do that. My computer program requires that I enter your credit card number in this field to process. Please just give me your credit card number and stop making my life so difficult."
By the time everything is said and done (and escalated), they always end up finding a way to accept a check in the mail.
Very helpful /s
I think privacy.com does a similar service, but I loved to have this feature for no extra cost. I assume it also benefits the CC company a bunch with happy customers and less labor costs since people will be calling less for this kind of situation.
https://www.marketwatch.com/story/mastercard-cracks-down-on-...
Interestingly at some point they modelled what would happen if the premiums of the older customers was increased and they reckoned they could charge some customers double and they still wouldn't switch. This could have been used to offset price cuts for younger customers and generate much more profit overall, but it was decided to be unethical so they didn't follow the model.
Customer marketing and reach out programs were net negatives. They lost more money than they did bring in by a large margin.
I now a club once sent a simple questionaire to members who had not worked out in a long time.. just to gage why.. massive cancellations followed.
I think the majority instead contacted customer services to manually cancel it. Some also did a chargeback, which companies hate as it is expensive.
But in the end, there were so many sleepers that every time there was a plan to email all customers about an offer, or new service, it was always raised that it might make a lot of customers aware that they have the subscription, or check with their kids if they still need it, so sometimes the mailshots were filtered to active members, or just skipped all together etc. It was an uneasy balance of "don't touch", and never felt nice.
Last year I was contracted back to that company to help sunset the product I worked on years before, writing tools to notify and cancel all recurring payments. A huge chunk of customers was then sleepers that had not logged for 7-9 years. I do wonder how many were surprised when they got the cancellation email! :)
It's beyond insane how, in the USA at least, you give someone a string of numbers and they basically get pull access to your money for what might as well be perpetuity. And that you have to use to a specific bank, Paypal, Apple Pay, etc. to have a system as simple as a list of entities authorized to bill you in the future. And the ability to terminate those permissions.
Just think how well most people would be served financially if everyone was receiving phone notifications when they were recur-rebilled. "$15 to 24-Hour Fitness" popups up on their homescreen. And they could cancel the permission. Or at least just think "hmm, what's that for? Ah, right, I do want to continue being billed."
It takes a lot of mental gymnastics and charity to imagine how this system wasn't expressly designed by and for the enrichment of grifters.
ISO 9001 requires to implement some kind of customer satisfaction feedback as to assess customer satisfaction for ongoing improvement.
When the ISO auditors/consultants said that they should do something about it such as sending surveys to subscribers to assess their satisfaction, the Sales & Marketing VP said that if ISO 9001 meant that they had to remind subscribers that they had a subscription they do not use, they would rather cancel the ISO 9001 certification project altogether.
I described another pattern here: https://caseysoftware.com/blog/working-for-a-dating-website
You would avoid some of the support costs, some chargeback costs and cost with negative publicity (people complaining about ”fraudulent” charges on social media).
On large enough scale you can likely do some calculations and eventually A/B testing to figure out what does this mean financially.
Yeah, that's what I assumed when I opened the email. Rather scummy in my opinion.
Those agents who pull my money without my explicit consent every time are the reason I'm keeping my card with minimal amount of money (I don't use credit cards, only debt cards).
When setting up a DD, you can give a european company your IBAN. They will be able to make withdrawal requests, directly to your bank account. Your bank will usually give you full control on what you can do with those. For example, my bank Bunq (https://bunq.me/) allows me to accept once, or automatically accept any debit request up to whatever amount I choose per period from that same merchant.
Direct Debits are free. You bypass credit card fees (which in Europe are much lower than in the US in the first place but still percentage-based). They are also usually real-time (though slower than the credit card network, and depending on banks and fraud checks there can be latency of up to a couple of days).
I wouldn't look at them as an shining beacon. They only cancel if you haven't watched it for a year, and none of your money is refunded, so it's not that great of safety net.