Mary P. Beggs, 71, a computer enthusiast from Winter Park, Fla., was bargain-hunting at a computer fair with her two daughters during the summer when a display for the Veterans of America Association caught their eye.
“There was a little booth and a man standing there with a straw hat, and there was a sign that said `Win a car,’ ” she recalled. “We all filled out these little slips and forgot about it.”
They forgot, that is, until a $4.85 charge appeared on her phone bill for voice mail, a service she did not have. It seems that while she had read the front of the sweepstakes form carefully, there was further fine print on the back.
Her sweepstakes entry had authorized the VAA–an organization based outside Philadelphia and formed last year to advocate veterans’ causes and provide members with discount services–to add a monthly fee to her phone bill.
The fee continues today. “I don’t know how to stop this,” she said. “The $4.85 isn’t going to make me or break me, but it’s my money, and it’s making me wild.”
According to consumer advocates, more and more companies are finding ways to obscure unpalatable details in the fine print of disclaimers, often inducing consumers to sign up for products or services without realizing what they’ve done.
“Increasingly, solicitations try to hide onerous terms and conditions in the fine print, which consumers rarely read,” said Stephen Brobeck, executive director of the Consumer Federation of America.
W. Mark Reilly of Washington, D.C., said he thought he was saying “yes” only to a free test of America Online when he took advantage of a promotion that was installed in a computer he bought recently. The promotion said it would let consumers try the commercial on-line service free for 50 hours. He was actually also agreeing to a paid membership.
“When you sign on, it asks for your credit card, but reminds you that you get 50 hours free,” Reilly said. After using the service for an hour and a half, he decided he preferred his direct Internet access, and thought that because he hadn’t used 50 hours, he was under no obligation. Then he saw his credit-card bill two months later.
“There is an AOL charge on there, and it’s some $19.95 fee,” he said. Reilly acknowledged that he might have missed the offer’s explanation on the computer screen.
One warning on a current electronic registration includes this complicated sentence: “You will not be charged your first monthly fee unless you don’t cancel within the first 30 days.” (On a promotional disk that America Online sends to potential customers, small print on a card reads in part: “To avoid being charged your first monthly fee, simply cancel your membership before your free trial ends.”)
Ann Brackbill, a spokeswoman for America Online, who conceded that the print disclaimers were small, said the computerized signup process requiring a credit-card number is “pretty clear.”
When Reilly called America Online to complain, the company said it would gladly refund his membership fee. At least 44 states, led by the Illinois attorney general’s office, are investigating America Online and its marketing procedures, said the Illinois and Florida attorneys general.
Earlier this year, America Online settled a complaint with 37 states and offered refunds to paid members who couldn’t log on to the service.
Consumer advocates say they have had limited success in restraining marketers.
“No matter how you change the words, there are ways to phrase things so people don’t read it,” said Herschel T. Elkins, a senior assistant attorney general for consumer law in California.
Elkins said law enforcement officials often found their hands tied in dealing with complaints from consumers who say they asked for one thing and got another, because such offers often meet the letter of the law– as the America Online one does.
Just how far marketers can go is often decided after the fact, in court. “The question is what will the courts allow,” Elkins said. “If marketers are telling the truth, how prominent does disclaimer information have to be? The standard has been loosening over the last decade, and not in the favor of the consumer.”
Even disclaimers that pass muster of consumer advocates are sometimes difficult for consumers to understand. “A disclaimer that is clear to the people who have written it into law is often befuddling to people of average intelligence,” said Elliot M. Burg, an assistant attorney general in Vermont. “Look at a credit-card agreement. I got an amendment to one, two paragraphs, and I had to read it several times to understand what it was saying.”
Often, it’s not only what an agreement says, but where it says it, as Marsha Longshore, a communications executive in Piscataway, N.J., found when she returned a mailer offering a free pair of L’Eggs pantyhose. The front of the card proclaimed “FREE PAIR!” and offered a “free pair of L’Eggs, Sheer Energy, Sheer Elegance, Silken Mist or Just My Size pantyhose just for the asking.”
When her free pair arrived, it came with four other pairs of pantyhose and a bill. She found herself enrolled in a program that would send her pantyhose each month–for a fee.
“The disclaimer was on the back of the card,” she said. “It does clearly say on the back side that you are enrolled in a L’Eggs hosiery program, so I feel a little embarrassed.”
Longshore said she paid the first bill and considered staying in the program. Ultimately, she said, “I decided I didn’t want people telling me when I needed to buy stockings,” so she called L’Eggs and acknowledged her mistake. “They couldn’t have been nicer,” she said. L’Eggs let her leave the program.
Jeffrey Smith, a spokesman for the Sara Lee Corp., which manufactures L’Eggs, said the company felt the marketing materials were clear and added that complaining customers could “return the items at our expense.”
As for the veterans association sweepstakes, the organization has said it will refund money to consumers who didn’t realize what they were signing up for. Joseph G. Caffey, the group’s general counsel, said it had dismissed the outside marketing firm that ran the sweepstakes.
Todd B. Grandy, a Florida assistant attorney general who is investigating the sweepstakes, said the veterans group did a better job than many other marketers in disclosing the terms of its agreement, yet, in Florida and most other states, conforming to the letter of the law is not enough. “If we can demonstrate that any marketing scheme can confuse consumers, we can seek relief,” he said.
The reason marketing devices like these persist, Grandy said, is that too few people report them. That’s also why companies are so eager to refund money to complainers, he said. “Most consumer agencies are complaint-driven, so if a company can avoid the complaints, they can avoid legal action,” he said. “It doesn’t mean what they do is not deceptive.”
