Cancel Me! Really! I Mean It!

Cancel Me! Really! I Mean It!

TRUE STORY. John Warne of South Zanesville, Ohio, accepted a free four-week trial subscription of the Week magazine last year but decided he didn’t want to continue. When he received a bill, he wrote "No thank you" on it and mailed it to the company. He continued to receive a bill every month for four months, and after the second month he got a letter threatening to turn his bill over to the collection department. "They just made me so mad," he says. A spokesman for the Week says it’s unusual for the magazine to slip up on a request to cancel.

WHAT’S UP. Companies don’t want you to cancel for a simple reason: Acquiring a new customer is a lot more expensive than hanging on to an old one. In a 2002 survey of over 100 financial services companies, the average cost to retain a customer was $57.33. The average cost to get a new one? A whopping $279.48. That’s why getting unglued can be tough. These days, people sign up for goods and services by mail or on the Internet and pay with an automatic debit from their credit card. There’s often no contact with a human being. "It makes it easier for a business to either purposely or not purposely ignore requests for cancellation," says Pamela Gilbert, a lawyer with Cuneo Waldman & Gilbert in Washington, D.C., whose firm represents consumers in class action suits. "Incompetence is kind of built into the system."

BATTLE PLAN. Make sure you understand what’s being offered and what you’re agreeing to pay for, including goods or services that come free for a set period. "I make it a point not to respond to any free add-ons, because most of the time I forget them," says Roy Cooper, North Carolina attorney general and chairman of the consumer protection division of the National Association of Attorneys General. If you sign up for a service, pay for it with your credit card, not a debit card or check. Under the Fair Credit Billing Act, you can dispute any charges to your card–an easier task than trying to get your money back after you’ve sent in a check. When canceling anything on the phone, write down the name and badge number of the attendant before you hang up; it could provide your only paper trail if you later find that the cancellation wasn’t processed. If you do have a problem, many state attorney general offices have consumer protection divisions that will help. (That’s how Warne got out: He called the Ohio attorney general’s office, which resolved the problem within a month.) Local Better Business Bureaus will often intercede as well. Find your local AG or BBB at

BONUS TIP. A telemarketer who makes a "negative option" offer (your account is automatically charged unless you cancel the service) has to tell you when the charges are recorded and how to cancel. That’s part of the Federal Trade Commission’s Telemarketing Sales Rule, which took effect March 31. -Michelle Andrews



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