Subscribers Warned Of Massive 'Renewal' Bills From Third Party Companies

SAN FRANCISCO (KPIX 5) - Consumer advocates are advising newspaper and magazine subscribers to disregard official-looking renewal notices from unauthorized billing companies. The third-party companies usually charge well above the publisher's regular price for a subscription renewal.

Wes Van Winkle found out firsthand.  The Berkeley attorney - and husband of a ConsumerWatch producer - recently received what appeared to be a renewal notice for his New York Times subscription from a company called Circulation Billing Services.  The amount for a one-year renewal was $1,099.95 - hundreds more than the paper cost last time he'd checked.

"Initially, I thought, 'oh God, the New York Times subscription has really gone up,'" Van Winkle recalled.

"No one should take these bills seriously,"  says Joe Ridout of the advocacy group Consumer Action. Ridout says unauthorized third party vendors have been sending notices that resemble bills to consumers for years,   hoping they'll pay the inflated prices. Ridout says the company's usually pass some of the money along to the actual publication—and keep the rest.

"The main purpose of this company's business model is to deceive customers into overpaying,"  Ridout said.

Several publications have notified subscribers of the scheme, advising them not to pay so-called sub-companies. According to one letter to subscribers, nearly 60 companies engage in the practice.

Under federal law, solicitations that look like bills must clearly state they are not bills and that recipients are under no obligation to pay. The notice from Circulation Billing Services does include that information,  in small print, on the back.

ConsumerWatch made several attempts to reach Circulation Billing Services.  No one from the company returned our calls.

The New York Times says it is planning to reimburse subscribers who paid their bill through Circulation Billing Services.