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Beware magazine renewal junk mail

There's a lot of junk mail floating around that looks like renewal notices from magazines you subscribe to. They're not; they're just ads.  Answer one, and you might be disappointed.  Fill one out, send in your money, and you might not get anything.  You might get a different magazine than what you asked for.  You might overpay.

You'll certainly irritate the people who print the magazines you subscribe to. 

There's a magazine junk mail war going on right now, between publishers and third-party companies called clearinghouses trying to cut themselves into the subscriber revenue stream.  If you don't read your mail carefully, you might end up as collateral damage.

Welcome to the murky world of magazine subscription sales. Almost anyone can sell subscriptions, through third-party arrangements the industry calls clearinghouses. That's why those flashy sweepstakes contests lasted so long. The deals are lucrative -- for the clearinghosues.  Third-party sellers can keep up to 85 percent of the subscription price as a bounty. 

So firms with names like "Magazine Billing Services" are sending their junk mail around, hoping to cut themselves into the subscriber revenue stream.  Publishers are crying foul, saying the junk mail looks like a bill directly from the magazine.

Sending any solicitation through the mail that look like a bill or invoice violates postal regulations.

But Magazine Billing says its mail is legal, and this is all just a case of sour grapes by magazine publishers, who aren't abiding by the rules they set years ago to pump up circulation numbers.

And while publishers, clearinghouses, and relevant law enforcement agencies sort this out, consumers should be wary.  Those who respond to the junk mail can end up losing money or their magazines, or at least somehow feeling deceived that they weren't doing business with who they thought they were.

The problem has gotten so bad for magazines that several, including Harper's, have taken to running "subscriber alert" notices in their pages.  National Geographic says its circulation department has been getting 50 to 75 complaints a week about such mailers since February of last year.

The trouble with Magazine Billing Services began last year, when a series of smaller magazines began to issue warnings to readers about companies with names like Publishers Processing Services Inc., Publishers Services Exchange, and American Consumer Publishing Association. The warnings all read about the same, such as this one from Track & Field News:

"(These companies are) not authorized to solicit your renewal nor can they fill your order," the magazine writes. "Many of our subscribers have been fooled as their mailing piece looks very much like our own renewal notice."

What's wrong with that?

For its part, Magazine Billing asserts that everything it's doing is perfectly legal. Gary Hutchings, who identified himself as a spokesman for the company, said most magazine publishers contract with clearinghouses to help them find new business. Sometimes, current subscribers are caught up in his solicitations, but there's nothing wrong with that, he said.

"When we send it, we have no idea if they have a subscription or not," Hutchings said.  Mailing lists are purchased from a legal list broker, he said. "All publishers don't want us to get renewals, they just want new business."  But if his solitications end up catching a few renewals, and Magazine Billing gets a cut, what's wrong with that?

What's wrong with that, Harper's Green said, is the finders' fee can be 85 percent. 

"There is technically nothing illegal about it," she said.  "But it is a little questionable. It looks like it's from Harper's. The artwork is very similar to our logo." She guessed that about 1,000 consumers have renewed their Harper's subscriptions through Magazine Billing, costing her magazine a lot of money. "It hurts Harper's bottom line... Harper's is a small magazine. Every dollar counts."

It also hurts consumers, she says, who are tricked into paying more than they should. Magazine Billings' offer is pricey, she said -- 36 issues for $54.99.  Harpers' highest-priced offer is $45. 

Steve von Dohlen, a deputy district attorney in San Luis Obispo County in California, said his agency is "looking into" the Magazine Billing mailers.   His agency has received "more than a couple of complaints" about the firm.  Some consumers said they received substitute subscriptions for other magazines when they ordered Harper's, he said. Others have trouble getting refunds.

"They feel they've been scammed somehow because they thought they were doing business directly with Harper's," he said.

'It flares up periodically'

This is hardly the first time consumers have faced confusion surrounding third-party magazine sellers, according to Dan Capell, who publishes Capell's Circulation Report. In fact, murky third-party sales have been going on for years.  Generally, these unauthorized sales firms somehow get their hands on subscriber lists, he said.

"It flares up periodically," he said.  "But it all comes back to the same thing -- list thievery. They are either robbing it outright or using false pretenses to get the list."

But the arrangments have led to legal trouble.  Just last year, the Oregon Attorney General settled a lawsuit with an Oregon-based company called IC Marketing involving allegations similar to facing Magazine Billing.  The state attorney general's office received hundreds of complaints during a four-year stretch from consumers who said they were receiving deceptive mailings for magazine renewals.  The settlement required IC Marketing to add the words "INDEPENDENT AGENT NOT A BILL KEEP THIS PORTION FOR RECEIPT OF OFFER" to its mailings.

IC Marketing did not admit wrongdoing in agreeing to the settlement. But the firm did do business under several names, including the American Consumer Publishing Association, according to the attorney general's office.  That name is on some of the mailers allegedly sent recently to Harper's readers, and subscribers of other magazines.

Publishers are getting bombarded

Jill Meyer Vollman is a lawyer who represented Coin World publisher Amos Press when it was sued by IC Marketing in 2001, after the magazine published a warning about third-party sales.  She said it's unclear if the current spate of mailings come from a new incarnation of IC Marketing, or a copycat. But she said one thing is clear:

"Publishers are getting bombarded with complaints from subscribers about this company. She's already been contacted by numerous publishers considering legal action but refused to name them.

Clearly, there's a mess here -– and magazine publishers may have themselves to blame for it. The problem of deceptive third-party mailings is another by-product of the same problem that led to recent circulation scandals at magazines, says Samir Husni, chairman of the journalism department at the University of Mississippi.

"Magazines for ages used publishers clearinghouses.  They were in the business to collect numbers...In (their) hunger to just beef up the numbers technically they let anybody generate subscriptions," he said.  "They had all the problems with the sweepstakes....Now we are seeing one scheme after another."

By creating a world that encouraged junk mail, they've trained consumers to expect and tolerate such solicitations. And consumers have been trained to believe that third-party firms might handle subscriber services such as billing.  That's helped create a confusing environment, one that's perfect for firms like Magazine Billing.

In the meantime, Harper's has made an important choice consumers need to know about. After publishing months of warnings, the magazine has decided to stop honoring new subscriptions ordered through unauthorized firms like Magazine Billing Services.

"There has to be a line drawn in the sand somewhere," Harper's Green said. "While I do not seek to penalize our subscribers, I have to look at the bottom line. The only way to stop these type of programs is to stop doing business with them."

That leaves consumers out on their own in this confusing world, left to judge what's an authorized subscription clearinghouse and what's not.  So a word of caution when tempted to order magazines by junk mail -- read the fine print. A call to the publisher wouldn't hurt, either.