SICK OF FORCED CONTINUITY? Well So's The FTC! Here's A Court Case!

[jacksonlin]

Have you ever signed up to one of those annoying internet marketing products where they say "Pay only $5.00 for the delivery fee and get XYZ insanely profitable course for FREE"...

TO ONLY FIND OUT LATER YOU'RE STUCK WITH A FORCED CONTINUITY PROGRAM?

Then it takes you FOREVER to get your cancellation - whilst in the mean time you were billed unknowingly?

Well the FTC are cracking down on it...

http://www.ftc.gov/os/caselist/09230...ytreecmplt.pdf

Federal Trade Commission v. Infusion Media, Inc., a corporation, also d/b/a Google Money Tree, Google Pro, Internet Income Pro, and Google Treasure Chest, West Coast Internet Media, Inc., a corporation, also d/b/a Google Money Tree, Google Pro, Internet Income Pro,




I think this serves as a warning against those irritating internet markets who don't tell you about the secret costs associated with your "FREE" purchase...

In other words...

PLEASE TELL US WHAT WE ARE PAYING FOR BEFORE YOU CHARGE US!

=]

[Jeff_Gardner]

I'm personally not sick of "Forced Continuity".

Would I be peeved if I bought something with a hidden continuity program? Probably. I might even get "irked". Then I'd cancel - or, in a worst case scenario, chargeback the purchase and wipe it clean. (Easy to do with Amex)

However, I don't have any problem with "Forced Continuity" when the marketer makes it clear that there is a forced continuity attached. And by "clear", I don't mean in the headline. I mean somewhere in the body of the sales letter in the same font size as the offer, price, etc.

It's a business model that works, like many others. And if done properly, a very powerful one.

So yes... those companies that hide their continuity on separate "terms and conditions" pages... or just don't tell you at all until after you've placed your order, deserve to be scrutinized. But overall, I think the "Forced Continuity" concept - done correctly - is a thing of beauty.

BTW, I would say the companies who don't tell their clients about the forced continuity would be in the minority, not the majority.

Best,
Jeff

[Richard Tunnah]

I agree with Jeff. Forced continuity programs have been going on for years offline with places like gyms and movie rental places most prominent users of such. However their terms are clear in that you know unless you cancel they'll take x amount per month. That's the problem with some online forced continuity programs. They hide the fact you'll be billed monthly and make it very hard to cancel.

Rich

[DrewG]

Originally Posted by Jeff_Gardner

I'm personally not sick of "Forced Continuity".

Would I be peeved if I bought something with a hidden continuity program? Probably. I might even get "irked". Then I'd cancel - or, in a worst case scenario, chargeback the purchase and wipe it clean. (Easy to do with Amex)

However, I don't have any problem with "Forced Continuity" when the marketer makes it clear that there is a forced continuity attached. And by "clear", I don't mean in the headline. I mean somewhere in the body of the sales letter in the same font size as the offer, price, etc.

It's a business model that works, like many others. And if done properly, a very powerful one.

So yes... those companies that hide their continuity on separate "terms and conditions" pages... or just don't tell you at all until after you've placed your order, deserve to be scrutinized. But overall, I think the "Forced Continuity" concept - done correctly - is a thing of beauty.

BTW, I would say the companies who don't tell their clients about the forced continuity would be in the minority, not the majority.

Best,
Jeff

Agree 100% with this post. Continuity isn't always a bad thing (think of how many people subscribe to magazines, WoW, ProActiv, etc..), it's the shady advertisers that hide the terms or continue billing after you've cancelled.

[TimCastleman]

Buy a cell phone lately? 2 year min with an early termination fee.

Want to work out in a gym? 6 months, 1 year, or 2 year commitment with an early termination fee.

Want to watch DirectTV? 2 years again with an early termination.

Life is forced continuity, get over it.


Tim

[Kay King]

Tim - It's the way it is being done that has led to complaints and investigations.

2 years on my cell phone - yup, I have that. The saleperson at the phone store explained it clearly to me before I signed anything AND I had to initial next to the continuity statement to indicate I had read it. Same thing at the gym and I agree this method is typical for products offline where ongoing service is concerned.

I think perhaps the "acknowledgment" is where this might lead. If you use forced continuity it may be necessary in the future for a customer to enter a code in a box on the signup page to indicate he understands what he's signing up for.

Online some of the companies have tiny, gray fine print and though we know it's smart to read before agreeing - the nature of the internet and the "free" marketing leads to many consumers who don't know the freebie or low cost "trial" comes with long strings attached.

Interesting question is whether google will begin cracking down heavily on use of their name - to avoid this type of brand exposure.

I understand why forced continuity works well for some products but it's the "hidden as well as we can" forced continuity that makes the process stink.

kay

[John Piteo]

I don't have a problem with forced continuity at all as long as it's done right. It's the GREED of unscrupulous marketers that I have a problem with. They end up ruining things for all of us.

[arepb]

Originally Posted by TimCastleman

Buy a cell phone lately? 2 year min with an early termination fee.

Want to work out in a gym? 6 months, 1 year, or 2 year commitment with an early termination fee.

Want to watch DirectTV? 2 years again with an early termination.

Life is forced continuity, get over it.


Tim

Agreed with the above, but let's admit that a LOT of internet marketers play fast and loose with the terms. Maybe it's not exactly bait and switch but it's not clearly defined for most users.

One of the best ways to combat those who don't turn off your continuity program is to use your AMEX card. You can turn off billing faster than Visa in most cases.

[TimCastleman]

Well how do you think continuity should work? Should you have to check a box or something else, just wonder how you would want it done?

Tim

[MichaelHiles]

Maybe the FTC can go after my mortgage company for their damn fixed continuity program.

err... nevermind

[garwil200]

I agree with all of the posts. My 2 cents is this: As a newbie to internet marketing, I have obtained some valuable information by way of Marketers giving large packages for just the shipping costs. In each case, I was clearly told upfront that I would be subscribing to a monthly newsletter, and how much it would be, nothing hidden. I had 30 days to unsubscribe, and the link was readily available, not hidden. I only took advantage of the companies, a couple times and canceled before the 30 days. All the others I stayed subscribed because they continued to provide value.

Non of these were FORCED continuity, opting out is easy. That is the way it should be. Just like in the offline world of marketing, there will always be the bad apples, trying to make a dishonest income. So it is our responsibility to not sign up with any offer, that is hiding monthly costs, and worse yet making it very difficult to opt out.

I am thankfull for all of the honest IM companies who are doing it right, and providing real value for us Newbies to IM. I am also thankfull I have found this Warrior Forum. It is my impression that the Warriors here are doing it right, and I feel comfortable working with other Warriors. Allen, has set it up to be self policing, so that unscrupulous people are kept out.

Thanks to you Warriors,
Jerry Garner

[BrianMcLeod]

"What we have here... is a failure to communicate...
which is the way he WANTS it... Well... he GETS it!"
-- (from the film Cool Hand Luke)

Nomenclature matters.

CONTINUITY is not evil.

FORCED Continuity is not evil.

HIDDEN continuity is most definitely evil.

Let's be clear in communicating outrage if we hope to have
any impact on changing the dynamic in the marketplace.

It wasn't simply forced continuity that cooked their goose here...

It was a pattern of allegedly deceptive marketing that, weighed
together, makes a strong case for enforcement in the eyes of the
gubment.

Best,

Brian

[SamKane]

Originally Posted by TimCastleman

Well how do you think continuity should work? Should you have to check a box or something else, just wonder how you would want it done?

Tim

An "initial here" box is probably the best method. Similar to cell phone companies. It might hurt conversions... But at least it will keep you
in business.

[Jason_V]

I'm just wondering how this is going to impact CPA networks. A lot of the stuff through them is the "You only pay shipping" then WHAM! The person gets a huge hit to their credit card the next month.

[arepb]

Originally Posted by SamKane

An "initial here" box is probably the best method. Similar to cell phone companies. It might hurt conversions... But at least it will keep you
in business.

I like that a lot. Conversions can drop if the customers you do have stay longer.

[Mike Anthony]

I think the point is being missed. When you are made aware of continuity it isn't forced. You chose to go ahead with it. If you didn't get to choose because you didn't know then its forced.

Mortgages are not forced neither a cell phone contract. You made a choice.

The heart of the complaint is here

"Information that a consumer's credit card will be charged or bank account will
be debited a monthly membership fee of $72.21 if the consumer does not cancel his website membership within seven days is not disclosed on the initial sign-up pages. on the payment information pages, on the confirmation pages, or in the confirmation e-mails"

[garyk1968]

Yep forced continuity is fine but it seems many people find it hard to cancel and that is a *major* issue, if you treat people badly you rip them off and only do it once, commonly termed a 'scam'. Make it as easy to cancel as it is to sign-up in the first and be very clear about the terms then thats fine.

Other posters have quoted gyms and such like, they are not the same thing. With gym/satellite tv/mobile phone subs when you sign you do so at the normal monthly rate and you are clearly told what the minimum length of contract is. With FC you pay a low rate and then are automatically bumped to the standard rate after a period of time which is normally in small print on the website!

[jasonl70]

As several people here have mentioned, forced continuity is NOT the same thing as hidden continuity, nor does it mean you can not easily cancel. It simply means you have to agree to the continuity program.

Example of forced continuity:

- those new netbooks that you get for $199 new - but you have to sign up for the verizon 3g access to get it for that price. It is not optional - if you do not sign up for the continuity (verizon service), you cannot get the netbook discount.

- And of course, the infamous Sports Illustrated ads (free clock, etc, if you sunscribe).

I think it is important that people are able to differentiate the differences. In itself, there is absolutely nothing shady about forced continuity.

[Sean Ski]

I think you're talking more about cpa forced continuity (the shady offers)... Pretty much every major IM guru has always told everyone upfront that they're using forced continuity - its the cpa programs that say get a free trial and only in the terms do they say you'll be charged 14 days after the purchase date $87 monthly (then it takes 4 days to actually reach the persons door step).

So yeah, those programs are probably going to have to straighten up which should lower conversions and allow more skilled marketers to take advantage just like they did when the google slap first happened... It'll weed out all the half-a** marketers who start saying cpa is dead after their offers stop converting as well.

[greff]

Just because people do it in the offline world does not make it right.

I am wondering why people do it at all. Is it because they want to make sure you pay at least one high fee before you cancel? Is it because they are charging too much? If the product is worthy, people will continue on with the program. If it is not, then, you don't deserve the money you stole.

[jasonl70]

Originally Posted by Mike Anthony

I think the point is being missed. When you are made aware of continuity it isn't forced. You chose to go ahead with it. If you didn't get to choose because you didn't know then its forced.

Mike, that is the source of lot of confusion. That is not what forced continuity is. That is HIDDEN continuity.

See my post above which explains what Forced Continuity is.

[jasonl70]

Originally Posted by greff

Just because people do it in the offline world does not make it right.

I am wondering why people do it at all. Is it because they want to make sure you pay at least one high fee before you cancel? Is it because they are charging too much? If the product is worthy, people will continue on with the program. If it is not, then, you don't deserve the money you stole.

Is verizon wireless stealing money from you with their netbook offer?

That is Forced Continuity.

Optional Continuity would be if they would still sell you the netbook for $199, and gave you the OPTION to sign up for their wireless service (ie, offered it to you as an upsell at checkout).

'Forced' does not mean you are forced to stay on the program. It just means you are 'forced' to enroll in it in order to take advantage of the offer.

[Lyn Woodring]

It seems to me that comparing offline and online FC is a little like comparing apples to oranges.
Take the cell phone for instance, the service is well established and you 'know' the quality of the product and service upfront. Not so with at least some online products. And they then don't generally call you or rent your name out to "in house" call centers to upsell you.
People are different and have different tastes. That's why you have different car makers and a myraid of colors and options to choose from. Offline you can get a feel for what you are buying.
I have the attention span of a knat...at times and these courses that offer like a hundred hours of CDs leaves me numb. I already am on info overload as it is. Some membership or contuinity sites seems to not have a beggining point, instead a kind of smorgasboard of options.
As a rule I don't have a problem with FC but now when I see where somebody has a free CD I generally just hit delete.
I'm trying to narrow my focus.
A few years ago I ordered a physcial business product at a very reasonable price. After I got the product I recieved a charge for $99. That was what they charged for it in full after 30 days. Nowhere in the sales material was that ever stated but it was in the literature they sent with the order. They did refund a portion...seems like it was $79. I figured it would cost me close to that $20 to ship it back anway.
It seems to me that if you're open and transparent and offer use value then FC is not an issue.
A better option might be like most software terms where the I disagree option is checked and where to recieve it you click the I agree button.
-Lyn

[Lance K]

Originally Posted by Jeff_Gardner

So yes... those companies that hide their continuity on separate "terms and conditions" pages... or just don't tell you at all until after you've placed your order, deserve to be scrutinized.

Some even try to hide the charges on their "terms and conditions" pages.

Rather than saying "$19.99 per month", they'll write "nineteen dollars and ninety-nine cents every thirty days".

Originally Posted by Jeff_Gardner

But overall, I think the "Forced Continuity" concept - done correctly - is a thing of beauty.

ABSOLUTELY!!!

Just don't model your process after the wrong person. If you wanted to have a long prosperous career as a professional football player, you wouldn't model your weight training program after the meathead using steroids would you?

[Lance K]

Forced Continuity and Hidden Forced Continuity are 2 totally different beasts.

Hidden Forced Continuity is just some short sighted d-bag doing forced continuity all wrong. And in most cases, Hidden Forced Continuity is really Hidden Forced Captivity. Because you know that if they went to those lengths to hide the continuity from you, they're not going to make the cancellation process as consumer friendly as possible.

Forced Continuity done right is a thing of beauty. With the right offer (and wording), people will thank you for it.

[Scott Ames]

Originally Posted by MichaelHiles

Maybe the FTC can go after my mortgage company for their damn fixed continuity program.

err... nevermind

HaHaHa.. that made me laugh outloud.

I love it.

[havplenty]

The very term 'Forced Continuity' connotes some kind of deception. After all the only way you can get people do things they don't want to do is 'force' them or trick them. I have listen lot's of the gurus who use this business model and they all, without exception tell their students to bury fact of future billing deep inside the copy. I think comparing what phone companies and gyms etc do with what goes on in IM is a red herring. These companies often are highly regulated and have consumer watchdog groups breathing down their necks. IM is a bit of an unregulated arena.

I think what we all have to do is realize that the money generated by the IM industry is become huge, and as this continues, the scamming of people will come under closer scrutiny.

Frank Kern learnt early. We should all learn from his experience.

[cclou]

Glad to see the FTC cracking down on hidden continuity. It's a terrible thing. I don't have a problem with forced continuity as long as it is clear and it is simple to cancel. My rule is if I buy something online with continuity, I need to be able to cancel it online as well.

This was a few years ago, but I canceled Netflix so I could use that money on more important things. It was so simple and I will probably rejoin in the near future because it was a positive experience.

[Alan Petersen]

Take it easy the complaint here is HIDDEN forced continuity which is illegal. Be upfront and transparent about it and all is cool. It's good news that the FTC is going after those who used HIDDEN forced continuity.

Originally Posted by TimCastleman

Buy a cell phone lately? 2 year min with an early termination fee.

Want to work out in a gym? 6 months, 1 year, or 2 year commitment with an early termination fee.

Want to watch DirectTV? 2 years again with an early termination.

Life is forced continuity, get over it.


Tim

[mikeyman120]

Yeah, I hear ya! I wouldn't mess with forced continuity, seems like trouble nowadays. I would go with Optional continuity so they know everything they are getting into ahead of ordering.

Mike

[jacksonlin]

I was wondering has anyone purchased the products created by the defendants?

Could they tell us what they thought of the experience?

That would be very interesting.

[Richard Tunnah]

Originally Posted by SamKane

An "initial here" box is probably the best method. Similar to cell phone companies. It might hurt conversions... But at least it will keep you
in business.

I know a lot of 'offline' companies that have forced continuity programs (gyms, mobile etc) in the UK make you sign a waiver saying you've read the terms and agree to them BEFORE you join. The UK government has been hot on this over recent years. Terms must be displayed in an 'easy' format along with cancelation procedures. Yes I'm sure it'll knock some of the conversion but people now expect it.

Rich

[Will_Surren]

After reading the comments on this post, I wonder how many have actually read the complaint by the FTC. From what I read and understand, this is not a case of forced continuity. The defendants were advertising a free product and in no way did they disclose any information about a continuity program.

The complaint states there was no information that a consumer's credit card will be charged or bank account will be debited a monthly membership fee of $72.21 if the consumer does not cancel his membership within seven days.

The FTC charges that there was no information about the program on the information pages, the confirmation pages, or in the confirmation e-mails. They had a Terms page with no underline to indicate the terms as a link. They hide the continuity program in their terms and according to the charges, it is unlawful for the customer to have to look for this information. The information must be on the page where they are paying.

Giving a customer a free gift as a sample of your product is a great way to gain a customer and if done correctly a continuity is a good thing. If they know everything up front and still order the free information, then they are agreeing that they want to try out the free info and they are willing to pay the continuity price to continue receiving information.

When and if they decide to cancel the service they simply cancel.... Now this part should be easy and a flawless immediate cancellation.


The FTC also charged that these people were selling the promise to make easily over $100K just by performing searches on the web. They use the Google logo and name in their business. They use a small disclaimer in tiny print to say that they are not affiliated with Google.



There are many charges brought on these guys and if the charges are true, these guys were definitely trying to scam people out of hard earned money...


A continuity program that is upfront and honest is perfectly fine with me and I sign up when I see something that I want.

If I change my mind I cancel.

If the business still charges me or I can not reach them, I will never do business with them again and I use my credit card company or PayPal to charge them appropriately and receive my money back.

[thezone]

Here is the whole statement of claim with the exhibits. Consisting of screen shots, order pages, and sales copy.

OH yeah..and testimoanials.

http://www.oag.state.tx.us/newspubs/...nmedia_pop.pdf

[n00b]

I agree that upfront forced continuity is fine and I don't think that's what's in question here.

I personally think that on the payment screen where you enter in you cc info it should have to say what is being billed today and what is going to be billed monthly. I would think they would be required to do that by the cc company's tos. If you're not willing to do that then you're trying to hide it because you don't believe it's a good offer.

[colzinfobiz]

I have recently found that if you have subscribed to a "forced continuity" program and paid through paypal. You can generally cancell this subscription in your paypal account, meaning you have full controll over that subscription. Another neat service from paypal.

[AndrewCavanagh]

I find the term "forced continuity" kind of entertaining.

Apparently we've all been "tricked" into it many times.

Do you pay rent?

Is your phone connected? (Those rat fink phone service suppliers...look at this I've been charged this month again!)

And don't get me started about my electricity supplier!


I agree 100% that you should be completely upfront about what you're charging your customers and trying to stick them on some kind of payment plan without telling them clearly upfront is clearly a dishonest (and illegal) practice.

But this whole idea that entering into a plan where you getting charged by the month is something new is kind of crazy.

Kindest regards,
Andrew Cavanagh

[kindsvater]

The problem is marketers who try to hide the continuity aspect of what they're offering, and/or those who make it extremely difficult, if not impossible to cancel it.

There have been many IM offers I've been interested in with continuity aspects, but unless payment can be made via PayPal where I'm in control of the subscription, I pass every time.

[Paul Schlegel]

I started warning people about Google Money Tree on November 19, 2008 and helped MANY people file CC disputes and complaints against this and other similar companies - the blog discussion on my site has over 800 comments over the past year and they still are trickling in (it's generally ranked number 1 or 2 fo Google Money Tree).

You will NOT see these types of hidden negative option offers disappear anytime soon regardless of the FTC crackdowns as it is a simple matter for the perpetrators to rapidly set up anonymous corporations tied to anonymous bank accounts as a recent experiment conducted by Griffin University professor Jason Sharman revealed:

Tax Justice Network: New study - Britain and the U.S. may be the dirtiest tax havens

This is why you see so many UK addresses listed on the scammy hidden negative option offers.

And even as more of the affiliate networks are cutting back on the scammy hidden negative option offers, many of the flogs promoting them have INCREASED in popularity AFTER the FTC 7/3/2009 operation short change crackdown. Here's a recent example I found:
Site Profile for sandiego-tribune-news.com | Compete

Some are being run through affiliate networks that are by invitation only that either have no actual website or no specific information about their affiliate program.

Whether or not everything is set up similarly to the recent TrendMicro report on Estonian CyberCrime - I don't know, but even if it's not, certainly the potential to keep these types of scams running for a VERY long time is there. You can read the report here:
Investigations on a Cybercrime Hub in Estonia | Malware Blog | Trend Micro

There was another similar set up - I believe out of China - where the organization behind it was able to become a registrar as well.