Magazine subscription scheme exploits unsuspecting consumers via Regulation E liability loophole
On Thursday of last week, I noticed a $49 dollar hold on my bank account from a company listed as “TMX*Magazine”. I immediately called Wachovia and inquired about the mysterious, unauthorized charge. Unfortunately, there wasn’t much I could do at that point because the transaction hadn’t hard posted yet.
A pleasant and helpful woman from Wachovia’s disputes department informed me to call back on Saturday after the transaction was complete.
Unable to wait three days until I could find some answers, I googled “TMX*Magazine”. Almost every link that came up pointed to information about a popular magazine subscription scam. Several consumer blogs were full of complaints from customers who had unknowingly signed up for a magazine subscription during an internet transaction. After reading through the blogs, I knew I was in for a battle.
I called the disputes department of Wachovia on Saturday, as suggested, and a patient man explained my options. In a nutshell, he said that because of Regulation E, he couldn’t do much at this point except give me the suspicious company’s phone number to request a refund. The company had a certain amount of days to refund my money before he could take action. Frustrated, I took his advice, called the company, requested a refund which it granted through an automated voice system, and waited for the money to be deposited back into my account. I also canceled my debit card and ordered a new one.
Meanwhile, I found and read Regulation E, the set of banking rules that regulate electronic fund transfers. I learned a lot by reading it –I suggest you read it if you bank online– but more than anything, I learned that there was a possibility that I wouldn’t be able to get my money back. In Sec. 205.6 Liability of Consumer for Unauthorized Transfers it states: “If the consumer notifies the financial institution within two business days after learning of the loss or theft of the access device (credit card information), the consumer’s liability shall not exceed the lesser of $50 or the amount of unauthorized transfers that occur before notice to the financial institution.” In other words, the longer you wait to notify the bank, the more money you are liable for. In my case, there was no coincidence that the charge was $49. I guess the other 99 cents would have made the subscription company seem too greedy. I was convinced that the company jumped at this opportunity to exploit the loophole.
After reviewing my recent online transaction history, I found that when registering for my first half-marathon via Active.com in October of last year, I also signed up for a magazine subscription that was to be billed about three months later. I suddenly remembered how cumbersome the registration process was with all types of special offers, fine print, and multiple confusing pages.
Luckily, the company refunded my money the following Monday. According to blogs, other consumers didn’t fare so well. Either they didn’t catch the charge until it was too late or the company just avoided their request for a refund.
In short, I learned three things. First, pay extra attention when buying things online. Take the time to read all fine print. If the transaction process seems suspicious, don’t go through with it. Second, pay for things online with a credit card, not a debit card. In general, your credit card company will be more forgiving and flexible than your bank. Also, many customers had overdraft fees from the unexpected charge. Third, be aware of what your liability is if your transaction turns out to be fraudulent. The longer you wait, the more liability you have.
Greetings! I’m Kevin D. Johnson, a business owner who has recently assumed the role of consumer advocate and internet activist. Atlanta, Georgia is my home.
Upon returning from my wonderful honeymoon in Jamaica in October 2008, I received what I thought was an ordinary American Express bill, but to my surprise it was a disappointing letter informing me that my credit line was reduced by about 65% for a highly suspicious and discriminatory reason. Considering my excellent credit score and pristine payment history, it just didn’t make sense. However, what does make sense are the unfair and insidious policies that I have uncovered when asking why. It is time to change them.
I created this web site to document and share my challenging journey to change what is wrong, unfair, and unjust in the credit card industry. The ultimate goal of this web site is to inform consumers of ways to stand up for themselves against treacherous business practices and to educate consumers about how to improve their credit. Finally, I hope to encourage a more open dialogue with credit card companies about their policies–good and bad.
I am proud to say that this blog's unyielding demand for change led to an important 
I was scammed on 28Jan08 while on an out-of-state trip via my "do-not-call" registered cellphone; after nearly 2 hrs of clever handoffs by 3 female telemarketers and navigating through numerous gimmicky webpages including the Los Angeles Better Business Bureau site, I reluctantly put $2895 on my AMEX card but was unable to download the required toolbar software. I was told a tech rep would be in touch in a few days.
Before shutting down my computer, I decided to try one last time to download by saving vice running the software; my antivirus protection told me to immediately shutdown. After restarting and running a complete scan, I realized the scam & called AMEX to stop payment so I could get my money back. I have since filed complaints with FTC and Nevada Attorny General Consumer Protection Div.
Posted by: Ken | March 14, 2009 at 05:48 PM
ALERT - WATCH OUT NETWORK MARKETING DISTRIBUTORS
SCAM FROM LAS VEGAS: DOTLESSDOMAIN.COM, SOLUTIONS
FOR THE NET dba BUSINESS CONCEPTS OF NEVADA and
WEBMENU.COM
Hi Rob and others of the SCAM in Las Vegas. The
following is my report as filed with the BBB in
Las Vegas on Nov. 14, 2008. Feel free to CONTACT me as we go forward to CONTACT the AG's office in Nevada and also YOUR STATE, the FBI Internet FRAUD UNIT. WE need to TAKE DOWN this COMPANY.
"I was contacted 8/18/08 by DOTLESSDOMAIN.COM, part of WEBMENU.COM. I was contracting for 6 months service for Internet Leads for my business (dba) CFE. The FEDX mail package to arrive 8/19/08. I checked online to verify - found NOTHING, so we sent
a Credit Card Check for $2,985 via FEDX on 8/19/08. They started calling XZIEX Distributors on 8/14/08 to solicit. I found out a few weeks later from a computer expert friend where to look on the Internet to find that IT WAS A SCAM. The IP's where mainly coming from 6 IP's. I will be contacting when I return home, the BBB of Austin, Tx., the AG's office of NEV. and Tx. and the FBI Internet FRAUD. TODAY, I went to their DROP BOX Address where I sent my check - 1350 E. Flamingo, Box 505 and the above Address (3790 Paradise, Suite 220)listed as BUSINESS CONCEPTS OF NEVADA dba SOLUTIONS FOR THE NET. The lady there verified the person, Fiona, who was NOT in. I than left. Also, it was DOTLESSDOMAIN.
COM." RE: Your Compliant # 202243, Firm: Business Concepts of Nevada, Inc.
Since there was limited space on the BBB Form, I will expand what happened that day. I was traveling back to Texas from a business trip to Idaho, and decided to come through Las Vegas. Spend a couple nights with in-laws who had already gone to both addresses above and reported back to me.
I first visited the Flamingo address in a strip mall, a UPS drop box. Certainly NOT a SUITE, right? Driving around the block to the Paradise address, there is a two story building. They are NOT listed on the marquee, but on the business directory in the lobby as the above name - Business Concepts of Nevada dba Soutions For The Net, Suite 220. Going up to the second floor I entered Suite 220 hallway, the office on the right was empty, probably Fionas. Walking down the hall, I could see the "BOILER ROOM" operation straight ahead with many people at computers CALLING YOU!!! The office on the left had a man and a woman as CUSTOMER SERVICE people. I asked for Fiona who was NOT in. I mentioned that I was a member of DOTLESSDOMAIN.COM and WEBMENU.COM. "This IS the place, right? YES, she said,and who are you? That is NOT important, but I am here in Las Vegas to PUT YOU PEOPLE OUT OF BUSINESS for SCAMMING ME!!" I than proceeded to walk out. I than called the Las Vegas Chamber of Commerce which is listed on their Website as being Members which they are since 2007 I believe Gay said. I talked to Gay S. there and told her the story. They CANNOT take action UNTIL it comes from the AG's Office as I understood it, but she made NOTE of our conversation. I than proceeded to the BBB in Las Vegas and FILED the above report.
When I returned home from another business trip, I found a Nov. 24, 2008 letter from the BBB of Las Vegas with the REPLY from DotlessDomain.com people that included Alec Hemingway, Customer Service Manager and James Farias (CEO and Account Holder). They gave their NORMAL legalize saying with Screen shots of their DEMO, ADVERTISING on Google and
Yahoo, Total HITS on my Key Terms (NO 2% return which you would expect) and, of course, their "NO REFUND POLICY". My answer to this was suppose to be returned by Dec. 4, but since we have been out of town since Nov. 19, Michele, said I could return it as soon as possible.
My suggestion is a CLASS ACTION SUIT if we can get a MLM Lawyer like Jeff Babener of Portland, Or., to take us on. I have written up the story on Rob Cook's - mlmwatchdog.com and ripoffreport.com. I have NOT heard from Rob and it was interesting that he was holding a MLM Seminar in Las Vegas back in Oct. with Jeff Babener and Mike Sheffield there as
speakers. I suggested they go to the addresses to check out the COMPANIES, but did NOT hear anything back. All SUGGESTIONS are welcome folks!!
IT IS ONLY WHEN GOOD PEOPLE, like you and me DO NOTHING, that BAD & EVIL PEOPLE SUCCEED!! I think we would all agree on this.
Posted by: Chuck P. (Wimberley,Tx) | February 11, 2009 at 08:32 AM
I recently bought theater tickets at Ticketmaster on-line. Several days later I was viewing my credit card account on-line and noticed a charge for "insurance" for my theater tickets in case I was not able to attend the performance. I have no recollection of ever checking a box authorizing this purchase or seeing an alert that my credit card was going to be charged for this "service". I did call them and they did reverse charge because "I called within a week of making the charge". They also contended it was the fault of Ticketmaster that I was not fully alerted I was making this purchase because Ticketmaster ran the website, not the insurer. If I had waited until I had gotten my bill, I would have already attended the play and it would have been too late to dispute the charge!!! Check you credit card bill online regularly. These scams are all over the place.
Posted by: Barb W | January 31, 2009 at 05:43 AM
Another option is to pay CASH instead of using your CC for every single purchase.
Posted by: George | January 29, 2009 at 11:46 AM
Hi Rob and others of the SCAM from Las Vegas. The following is my REPORT as filed with the BBB in Las Vegas on Nov. 14, 2008. Feel free to CONTACT me as we go forward to CONTACT the AG's office in Nevada and also YOUR STATE, the FBI Internet FRAUD UNIT. WE need to TAKE DOWN this COMPANY.
"I was contacted 8/18/08 by DOTLESSDOMAIN.COM, part of WEBMENU.COM. I was contracting for 6 months service for Internet Leads for my business (dba) CFE. The FEDX mail package to arrive 8/19/08. I checked online to verify - found NOTHING, so we sent
a Credit Card Check for $2,985 via FEDX on 8/19/08. They started calling XZIEX Distributors on 8/14/08 to solicit. I found out a few weeks later from a computer expert friend where to look on the Internet to find that IT WAS A SCAM. The IP's where mainly coming from 6 IP's. I will be contacting when I return home, the BBB of Austin, Tx., the AG's office of NEV. and Tx. and the FBI Internet FRAUD. TODAY, I went to their DROP BOX Address where I sent my check - 1350 E. Flamingo, Box 505 and the above Address (3790 Paradise, Suite 220)listed as BUSINESS CONCEPTS OF NEVADA dba SOLUTIONS FOR THE NET. The lady there verified the person, Fiona, who was NOT in. I than left. Also, it was DOTLESSDOMAIN.
COM." RE: Your Compliant # 202243, Firm: Business Concepts of Nevada, Inc.
Since there was limited space on the BBB Form, I will expand what happened that day. I was traveling back to Texas from a business trip to Idaho, and decided to come through Las Vegas. Spend a couple nights with in-laws who had already gone to both addresses above and reported back to me.
I first visited the Flamingo address in a strip mall, a UPS drop box. Certainly NOT a SUITE, right? Driving around the block to the Paradise address, there is a two story building. They are NOT listed on the marquee, but on the business directory in the lobby as the above name - Business Concepts of Nevada dba Soutions For The Net, Suite 220. Going up to the second floor I entered Suite 220 hallway, the office on the right was empty, probably Fionas. Walking down the hall, I could see the "BOILER ROOM" operation straight ahead with many people at computers CALLING YOU!!! The office on the left had a man and a woman as CUSTOMER SERVICE people. I asked for Fiona who was NOT in. I mentioned that I was a member of DOTLESSDOMAIN.COM and WEBMENU.COM. "This IS the place, right? YES, she said,and who are you? That is NOT important, but I am here in Las Vegas to PUT YOU PEOPLE OUT OF BUSINESS for SCAMMING ME!!" I than proceeded to walk out. I than called the Las Vegas Chamber of Commerce which is listed on their Website as being Members which they are since 2007 I believe Gay said. I talked to Gay S. there and told her the story. They CANNOT take action UNTIL it comes from the AG's Office as I understood it, but she made NOTE of our conversation. I than proceeded to the BBB in Las Vegas and FILED the above report.
When I returned home from another business trip, I found a Nov. 24, 2008 letter from the BBB of Las Vegas with the REPLY from DotlessDomain.com people that included Alec Hemingway, Customer Service Manager and James Farias (CEO and Account Holder). They gave their NORMAL legalize saying with Screen shots of their DEMO, ADVERTISING on Google and
Yahoo, Total HITS on my Key Terms (NO 2% return which you would expect) and, of course, their "NO REFUND POLICY". My answer to this was suppose to be returned by Dec. 4, but since we have been out of town since Nov. 19, Michele, said I could return it as soon as possible.
My suggestion is a CLASS ACTION SUIT if we can get a MLM Lawyer like Jeff Babener of Portland, Or., to take us on. I have written up the story on Rob Cook's - mlmwatchdog.com and ripoffreport.com. I have NOT heard from Rob and it was interesting that he was holding a MLM Seminar in Las Vegas back in Oct. with Jeff Babener and Mike Sheffield there as
speakers. I suggested they go to the addresses to check out the COMPANIES, but did NOT hear anything back. All SUGGESTIONS are welcome folks!!
IT IS ONLY WHEN GOOD PEOPLE, like you and me DO NOTHING, that BAD & EVIL PEOPLE SUCCEED!! I think we would all agree on this.
Posted by: Chuck P. (Wimberley,Tx) | January 28, 2009 at 10:52 AM
this happened to me too!! i didn't catch it in time though so my story was different but after a long battle i finally got my money back. i am always amazed at how laws that are supposed to protect us end up still hurting us because people can take advantage of the smallest loophole and blow it up. can you imagine 100,000 people being charged $49 and not knowing it or being liable for it? something should be done i agree but we must also educate ourselves and stay in the know about regulations like you mentioned. we must also go after the web sites that partner with these companies probably for a good amount of money.
Howard E.
Posted by: Howard E. | January 14, 2009 at 07:53 AM