Attorney General's News Release

March 21, 2006

Time magazine improperly billed Missouri subscribers; will pay them $116,000 in settlement with Nixon

Jefferson City — More than 3,000 Missouri consumers who were improperly billed for unwanted Time magazine subscriptions will be eligible for restitution payments totaling approximately $116,000 from the company, Attorney General Jay Nixon announced today. The magazine will also provide clearer information to its customers about the renewal process to help avoid future problems, Nixon said.

The restitution is part of a $4.3 million nationwide agreement between Time Inc. and 23 states. The magazine will refund the money to more than 108,000 eligible consumers nationwide who made payments for magazine subscriptions that were renewed without the consumers' consent between 1998 and 2004. Missouri's part of the of the settlement was filed today in Cole County Circuit Court.

Nixon says the settlement resolves the states' allegations that Time engaged in deceptive marketing and billing practices, primarily concerning automatic renewal offers. The states investigated complaints that Time was billing consumers or charging their credit cards for unwanted renewals of magazine subscriptions.

The complaints arose when Time broke with the long-standing industry tradition of limited-term subscriptions that are renewed at the customer's option at the end of the subscription term. Instead, the magazine initiated an automatic renewal method without adequately informing customers of the change, which required the customer to cancel the subscription if a renewal is not wanted. The states also investigated complaints that Time mailed consumers solicitations that appeared to be invoices and lacked the disclosures required by law.

"Fairness to consumers must never be compromised, despite the ever-changing competitive demands of the marketplace or norms and standards of marketing," Nixon says. "We believe Time did not provide clear and adequate purchasing information and unfairly charged consumers for subscriptions renewals they did not intend to buy. This agreement should put a halt to those practices."

In the settlement, Time agreed to provide clear disclosures to consumers concerning all of the terms for automatic subscription renewals. Before the end of the subscription period, Time will send customers written reminders of the automatic renewal, their right to cancel the subscription, and the procedure for cancellation.

Time will also honor all requests to cancel subscriptions as soon as possible, and refund the subscription price to all customers who were charged for magazines they did not order.

Within the next three months, Time will identify eligible consumers from its records and then send state-approved refund letters and claim forms directly to those 3,100 Missouri customers who may be eligible. The letters will explain the settlement and contain instructions on how to apply for refunds. Eligible consumers will not have to contact the Attorney General's Office to qualify for a refund.

Inquiries from consumers should be directed to consumer@ago.mo.gov or 1-800-392-8222 (from within Missouri) or 573-751-3321 (outside Missouri).

All media inquiries should be directed to the Press Secretary.

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