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AG Ferguson: Washingtonians to receive full refunds on hidden subscription renewal charges

Synapse Group offered heavily discounted magazine subscriptions without clearly disclosing they auto-renewed at full price

OLYMPIA — Attorney General Bob Ferguson today announced that Synapse Group, the country’s top magazine subscription company, must return all of the money it charged more than 2,000 Washington consumers for deceptive auto-renewals, an estimated total of $125,000. These customers bought magazine subscriptions at a highly discounted promotional rate of $2. However, the company did not clearly disclose that these $2 subscriptions would auto-renew at full price. In addition to the checks themselves, Synapse is also required to pay the Attorney General’s Office $750,000 for reasonable attorney costs and fees, future monitoring and enforcement of today’s resolution, and future enforcement of the Consumer Protection Act.

This promotional offer was given to consumers who redeemed Delta Air Line miles as part of Synapse’s “Mags For Miles” program, which allows customers to purchase subscriptions with their frequent flyer miles. From 2011 to 2016, Synapse falsely implied on its “Mags for Miles” mailers that Delta Air Line miles would expire if consumers didn’t use them by a specific date. In fact, Delta miles never expire.

The company used this misleading claim to motivate consumers to redeem their “expiring” miles for magazines. After consumers redeemed their miles, Synapse then offered them the separate $2 subscriptions promotion to be paid for with a credit card — which would auto-renew, often without the consumer’s knowledge, at an average of about $50 per consumer.

The Attorney General’s Office received seven complaints about Synapse overall, three of which complained about auto-renewals or mailers. Several dozen Washington consumers also complained about Synapse to the Better Business Bureau.

 “Synapse Group enticed consumers with a hard-to-refuse price of just $2 for a magazine subscription, but hid the fact that those subscriptions automatically renewed at full price,” Ferguson said. “If a deal looks too good to be true, it probably is. Be skeptical. If you see anything suspicious, contact my office. We will hold companies accountable for lining their own pockets by taking advantage of consumers.”

As part of the assurance of discontinuance, filed in Thurston County Superior Court, Synapse is legally required to refund the entire auto-renewal fee it charged consumers who received the deceptive Delta mailers. The company will refund an average of about $50 per person, though that amount may be higher or lower depending on how many subscriptions a consumer purchased. Attorney General’s Office estimates consumers will receive up to $125,000 total in refunds.

Consumers will not have to file a claim to receive this refund. Synapse will send them a check in the mail with their full refund amount. For questions about this resolution, contact the Attorney General’s Office at CPRContact@atg.wa.gov.

How Synapse conducted its scheme

Synapse Group is a magazine subscription company that markets and manages subscriptions for magazines around the country. One of the company’s marketing programs, called “Mags For Miles,” allows customers to use their unused airline miles to purchase magazine subscriptions.

From 2011 to 2016, the company sent “Mags For Miles” mailers to Delta airline customers, which included warnings to "redeem your miles now,” and “don’t let your miles remain unused.” These mailers looked as though they were coming directly from Delta, and included a “mileage redemption voucher” that consumers could use to order subscriptions with their miles.

However, Delta miles, known as “SkyMiles,” do not expire. Delta eliminated expiration on SkyMiles at the start of 2011, just before Synapse began sending the deceptive mailers.

SkyMiles mailer

A Synapse Group mailer envelope from 2015.

After these Delta consumers redeemed their miles using the Mags For Miles voucher, a window would pop up offering them a separate promotion: a “limited time offer” of $2 for a 6-month magazine subscription. As the consumers entered in their payment information for this promotion, Synapse’s website did not make it clear to consumers that their discounted subscription would auto-renew, six months later, at the full newsstand rate — often many times more expensive. As a result, consumers were often not aware that their subscriptions would automatically renew. On average, consumers who purchased these $2 subscriptions were charged about $50 in later auto-renewals.

After consumers discovered their unwanted auto-renewal, they often had a difficult time canceling. Many of them first reached out directly to the magazine to cancel their subscription, only to find it was actually Synapse who managed their subscription and made the charge. Many consumers complained that Synapse was difficult to reach or avoided canceling consumer’s subscriptions.

One consumer from Vashon wrote about this in a complaint to the Better Business Bureau: “About a year ago, I subscribed to 4 magazines through a special offer for one year. NEVER did I authorize a renewal of the subscription nor was it part of the initial offer. Without my authorization this company renewed all 4 subscriptions and then made it look like they were renewed through the actual magazine company. … I had to call one of the magazines directly to get the name of the company and then look them up on the internet and find a corporate number in order to talk to a live person.”

Details of the resolution

Within six months of today’s resolution, Synapse is legally required to fully refund consumers who received the deceptive mailers and paid the auto-renewal charge. More than 2,000 customers in Washington are eligible for this refund and will receive a check from Synapse in the mail. Consumers do not need to file a claim to receive their check.

Synapse is also required to clearly disclose their auto-renewal policy before consumers make their purchase. The company is prohibited from engaging in this type of conduct in the future, including sending misleading mailers regarding consumers’ airline miles.

Assistant Attorneys General John Nelson and Mina Shahin led the case for Washington.

The Attorney General’s Office Consumer Protection Division enforces the Consumer Protection Act and other statutes to help keep the Washington marketplace free of unfair and deceptive practices. The division investigates and files legal actions to stop unfair and deceptive practices, recovers refunds for consumers, seeks penalties and recovers costs and fees to ensure that wrongdoers pay for their actions.

Consumers may report any unfair or deceptive business practices to the Consumer Protection Division by filing a complaint at https://www.atg.wa.gov/file-complaint.

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The Office of the Attorney General is the chief legal office for the state of Washington with attorneys and staff in 27 divisions across the state providing legal services to roughly 200 state agencies, boards and commissions. Visit www.atg.wa.gov to learn more.

 

Media Contact:

Brionna Aho, Communications Director, (360) 753-2727; Brionna.aho@atg.wa.gov

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