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NY Ruling May Change SW Subscription Handling

I was both bemused and pleased to read about NY Attorney General Andrew Cuomo having extracted a $375K settlement from both Symantec and McAfee to set aside what Network World reports as “…charges that they automatically charged customers software subscription renewal fees without their permission.” The gist of the argument is that customers didn’t receive sufficient warning that their AV service fees were really subscriptions that would renew automatically on a yearly basis after the initial purchase period expired. Here’s my favorite snippet from the story, a quote from Cuomo’s office: “Companies cannot play hide the ball when it comes to fees consumers are being charged.”

At least, in the enterprise world where service contracts are an important part of any volume purchase agreement, and must be invoiced yearly, things are a bit more explicit. But since so many IT administrators also dole out advice on home and personal gear and software, as well as take care of company or organization assets, you might want to let your users know that they’ll be able to opt out of automatic renewals in the future if they choose to do so.

Cynics see this tactic as a way to keep company revenue streams topped up, because they virtually guarantee ongoing cash flow once users sign up for a subscription. Both companies explain this maneuver as a way to help protect customers, especially by making sure they can keep their security software up-to-date. It will be interesting to see how their bottom lines fare as a result of this ruling (companies that do business in NY state are now required to refund such charges at user request, as long as users ask for a refund within the 60-day period following the posting of fees to a credit or debit card, bank account, or other payment instrument).

Personally, I think auto-renewal is a good thing, but that consumers shouldn’t be forced into accepting the arrangement. I also think that companies should be required to send a notification 60 days before auto-renewal occurs, and include opt-out information and links in such e-mails to make it easy for consumers who don’t want to stay on that bus to get off if they choose. I already get this level of service from companies based in the EU (where this sort of treatment is the norm), so US-based companies should be able to do likewise.

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