Mystery magazine subscriptions, the fine print, and American Express

A well-educated, normally astute consumer recently related a story of $160 in unexplained charges on his American Express Gold Card. He found himself on the hook for subscriptions to magazines -- published by American Express -- that he couldn't remember ordering.

That's because he didn't -- or did he?

The man, who because of his position in the financial industry didn't want his name attached to what actually occurred, had entered a sweepstakes early last year. It was a chance at instant riches and all he had to do was fill out a brief form that included some of his interests.
What he didn't realize then was his choice of interests would lead him to become part of three clubs,which would in turn trigger three magazines subscriptions. Seemingly out of nowhere magazines started showing up.

He said he didn't think much of it because he had received gift magazine subscriptions from family and hadn't really kept track of which he was actually supposed to get.

In June 2008, his card was charged for the magazines. He complained he didn't want them, the subscriptions were canceled and the charges were promptly reversed.

A couple of months ago magazines started showing up again. He had no idea why. Again, American Express canceled the subscriptions and credited him back. But, frustrated with the situation, he canceled his card.

Then came the explanation. The computer identified canceled subscriptions' renewal date and automatically
renewed them and billed him.

Here's what Amex has to say about the whole process:

"We never charge a customer for a product that they did not order," said Jill S. Davison, vice president of corporate communications for American Express Publishing Corporation.

She then explained how someone gets signed up.

"A customer receives an offer via mail. A customer returns an order form to our fulfillment center. We receive the order form, the order is entered into our systems, and then the customer is charged for the product ordered," Davison said, adding, "I assure you, we only charge customers who order our products." And, she explained, anyone unhappy with the situation they find themselves in after such a transaction has an out.

"It's also important to convey that if a customer orders a product and the customer is not satisfied or does not want the product, we will provide a full refund," Davison said.

While he appreciated American Express' courteous and prompt service, the customer didn't appreciate having to undo the charges. Still, he ate much of the blame.

When a smart professional gets lost in the fine print, you can be certain many others will, too. It's especially of concern when the company you are dealing with already has your credit card information.

"I didn't read the fine print," he said. "I didn't know I was going to receive three trial issues of these free magazines and once the trial period was over they'd start billing me. That was the fine print."

American Express got in hot water over the connection between its sweepstakes and magazines about a decade ago. The company settled with 48 states that had pursued action and agreed to include a disclosure regarding the contests whenever they sent out entries. The only hitch: consumers have to actually read the disclosure for it to do any good.

So this pretty smart, normally meticulous guy was left feeling a bit slow after realizing that he actually signed up for subscriptions he had no idea he signed up for.

Certainly, using sweepstakes as a come-on is a pretty shady business model since the premise is to use the lure of the big bucks as distraction from the real purpose.

If you've ever entered one of those contests in a mall where you drop a card with some personal information into a car window or in a box, there's an awfully good chance that you soon afterward received a call from a company selling timeshares or were offered a "free trip."

Why would this happen without you realizing it? Because on the back of almost every one of those entry cards is the fine print explaining that the contest is being run by a timeshare company, and entering the contest allows them to use and sell your personal information. Putting your name on that card gets you on the "suckers list" since you've now identified yourself -- and give up all your personal information -- without regard for the fine print that should have scared the heck out of you because you thought you could get something for nothing.

Free money, cars or trips can be tempting. But there's always a catch. Not knowing what the catch is is where you run into trouble.

"There's nothing free in the world," the businessman with too many magazines said. "I know that."

He vowed to never again enter a contest -- except the lottery, and only when the prize exceeds $200 million.
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