Reader Voices: Autorenewal defenses

Protecting ourselves from online services that employ hidden autorenewal clauses

How can we protect ourselves from online services that employ hidden autorenewal clauses to keep charging us? Readers responded to my recent story about how credit card companies like American Express handle disputed autorenewal charges with some ideas on what we can do about it.

"I thought about this a while back while working with a client who didn't want to buy on the Internet because of credit card security concerns," wrote one reader. "The workaround was to buy a gift card, for the appropriate amount, with cash, so there wasn't a credit card number attached to allow auto-renewal. Just use the gift card once, then cut it up and throw it away. Be sure to figure the cost of the gift card into the price of the product, though. The client in question was an AAA member, though, and they apparently have a program where they waive the card charge and just issue the card for the amount of value received for members. I also thought this was a nifty idea for safeguarding credit cards while on vacation, too. At most, the thief gets the vacation spending money, and no connection to me that could be used to commit identity theft."

Another reader had a suggestion that can also save money on the price you pay. "For years I purchase software only in shrink-wrapped packages or downloaded from Newegg.com. In fact buying from Newegg turned out to be cheaper than the autorenew offers that appear one year after installation. I then uninstall the 'old' version and reinstall the 'new' one. This keeps me current and avoids autorenewals. From what I've read it is less hassle than fighting with a software firm and credit card company over an unwanted autorenewal."

Many readers advocated using the one-time credit cards available from various financial institutions. "I personally use one-time credit card numbers when making purchasing on-line, including autorenewal items," wrote another reader. "To date at least, whenever these companies have tried to automatically renew by charging to those numbers, the charges have been declined. Bank of America calls their one-time numbers as 'ShopSafe account numbers,' Discover Card refers to them as 'Secure Online Account Numbers,' and Citibank goes by the name of 'Virtual Account Numbers.' There may other such services, but those are the only ones that I am aware of. Years ago, American Express did offer one-time credit card numbers, but they discontinued the service. The explanation I got was that not enough people were using them."

But such virtual or one-time credit card numbers don't always work as you might expect. "The one time number doesn't help, at least for Discover," a reader wrote. "The number can be used by that specific vendor, but they can use it as many times as they want, as I discovered when a subscription was automatically renewed with my year old one time number. I haven't checked the other credit card vendors' policies."

"Not all virtual account numbers are created equal," agreed another reader. "As has been previously noted, with Discover you must call to get a virtual account cancelled. Citi and Bank of America (MBNA) offer the option of creating a number with specific time and dollar limits. This worked advantageously for me, ironically, with a subscription to Consumer Reports online service. I didn't find it to be worth the money and failed to notice the evergreen clause in the subscription. A year later I got a snail mail notice saying that there was a problem with my renewal. No problem for me; I didn't want it and didn't get charged for it."

Other readers think a little more drastic action is called for. "The cure is simple but inconvenient. Do not purchase products with autorenewal clauses and do not do business with credit card companies you feel won't stand by you in a dispute. These practices will stop when they are no longer profitable. Nobody likes to read the fine print but before authorizing anyone to charge your credit card, it's not that difficult to copy the fine print into your word processor and search for terms like "auto" or "renewal" ... you can even do this from within your browser."

Should we really all have to read every sneakwrap license agreement for autorenewal clauses? Maybe not. "One change I'd like to see involves more diligent disclosure," wrote another reader. "For me, it's not enough to move autorenewal from the EULA to a separate, clearly worded agreement because a year old agreement is usually forgotten. I want notification from the vendor shortly BEFORE autorenewal is executed --including a chance to opt out. And ideally, I'd also like clear and explicit notification from the credit card company each time autorenewal is processed. I believe these notifications would actually save everyone money because vendors and lendors could spend less on "customer service" trying to make the charges stick. Of course, I don't expect v/lendors to embrace this idea without a law requiring it, but I really think they would benefit as much as the consumer."

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