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AG's office touts settlement from RealNetworks
RealNetworks, a Seattle-based digital media provider, will pay a $2.4 million settlement to customers regarding unfair and deceptive practices, most notably in it's practices with supposedly "free trials."
According to Washington State Attorney General Rob McKenna's office, over 500 complaints have been filed to the AG's office over the last seven years regarding RealNetworks' "free" trials. Consumers reported "odd charges" showing up on credit card statements, being billed monthly for premium television services they never agreed to, and sports or game content that they never ordered.
"Deceptive pre-checked boxes and fine print obligated consumers to not-so-free trials for subscription services they didn't want in the first place," McKenna said. "People were charged for months - sometimes years - paying hundreds of dollars for subscriptions they knew nothing about."
The AG's "Consumer Protection Division" filed a lawsuit and settlement in King County Superior Court earlier this week to end these unfair and deceptive practices. Among the practices noted are what the AG's office called "free-to-pay conversions" in which a free trail quickly becomes a paid subscription unless a user takes quick action.
Paula Selis, who oversees the AG's "High Tech Unit" said that even consumers who caught on to the tricks were given the runaround by RealNetworks representatives.
"Some said they had difficulty getting RealNetworks to stop the charges and others complained that when they called the company to cancel subscriptions, they were pitched even more 'free trials,'" Selis said.
Jennifer Horwitz, a Seattle resident, was one such customer.
"RealNetworks didn't dispute that I had cancelled their service before the free trial expired but when I asked them for a refund, they refused," she said. "I had to fight my way up the chain of command. They continued to stonewall, only agreeing to a partial refund as a 'courtesy to me.' I believe this was calculated to make a profit by misleading consumers and taking money they were not entitled to."
The settlement that McKenna was able to work out falls under the federal Restore Online Shoppers Confidence Act. The piece of federal legislation requires a customer's express consent before a free-trial switches over to a paid subscription. According to McKenna's office, this is the first time the legislation has been successfully enforced.
Some of the other practices RealNetworks will have to cease include:
• the discontinuation of using pre-checked boxes to obtain consent from customers to purchase products or services
• stop offering free-to-pay conversions that do not clearly disclose all the terms of the offer, including subscriptions automatically charged to a customer's credit card
• provide an online method of cancellation so that consumers can easily end their subscriptions
• send e-mail or other reminders to customers that they are currently enrolled in a free-to-pay conversion, along with instructions on how to cancel the subscription
• cancel subscriptions within two days of a customers request to do so
• inform consumers who have called to cancel a subscription of additional subscriptions on their account
The settlement also provides approximately $2 million to customers who feel victim to these practices prior to December 2009, when the majority of complaints were lodged with the AG's office. Customers who may have unknowingly signed up for subscription services between January 2007 and December 2009 will receive a postcard indicating they're eligible for a refund. Customers may also visit www.realnetworksrestitution.com to submit a claim.