Lucy Ann Rieger, Library Update Inc.: Past experience with Thompson—dealing with a law library that had only clerks, not a librarian; the clerks got invoices and sent them to accounting, which paid. The invoices were confusing—there were multiple subscriptions for the same publication, and invoices were sent for renewals in the same month a new subscription began. Thompson, when called, wouldn’t tell the library its account information, wouldn’t tell it what duplicates it had. The subscription periods were sometimes over 5 years because Thompson would send invoices and credit it to future subscriptions. She asked them for a refund and cancellation of duplicates; initial answer was no until she went to the AALL. This was not just a mistake.
Betsy Stupski, Florida AG’s office and Superlawlibrarian: In 2006, one of her ADAs came to her for a looseleaf on ADA Compliance, from Thompson (no relation to Thomson)—assured her the book would be extremely valuable. Since her office does handle such issues, she agreed to a purchase. Problem arose with renewal: apparently signed up for a renewal plan that included many other titles. Received “HR Question and Answer book” and $163 invoice; sure she hadn’t ordered it. Complained to supervisor, eventually got agreement that she wouldn’t have to ship the book back, they’d UPS it. She was worried about going through the same process in a few weeks; consulted an attorney in the economic crimes division, Tina Furlow.
Problems with publishers: unordered merchandise; order forms made to look like invoices or renewal notices. She was interested in solving the problem on a structural level, rather than one unordered shipment at a time.
Lessons: make waves. Keep fighting. Multiple complaints are more likely to get the AG to act. Formalize your complaints in writing. Be wary when dealing with an unfamiliar publisher—pay close attention to documentation. Use your contacts. Her advantage: she was in the AG’s office! (Strikes me as an example of picking the wrong target; but then, if you have an abusive standard contract, you might forget to modify it for the AG.) Might take some time—received unordered merchandise in 2007, and settlement only happened a year later. Don’t throw out the baby with the bathwater—they did like the ADA Compliance Manual and wanted to continue the relationship with the publisher, but they didn’t want to take everything the publisher wanted to sell.
Tina Furlow, Florida AG’s office: Settlement agreements with major legal publishers. Unordered merchandise is a familiar consumer complaint. Prior investigations of things like “free ringtones” that came with charges to the cellphone bill. Began with one complaint, but many consumers were receiving recurring charges on their bills—an emerging marketing method. Result: agreement with cellphone company not to partner with other companies that advertised free ringtones. Ringtone “subscriptions” were a new twist on an old problem.
Useful for investigation: Betsy and others still had their notes and emails of contacts with the company. Retention is important! Assistant librarian had investigated publisher via website and ordered via phone; didn’t remember anything about additional publications. Renewal was where the problem began. The document says it’s the ADA renewal invoice. HR Question & Answer invoice appears to be a typical invoice as well. The issue was resolved in one sense: the office hadn’t paid. But there was still time and aggravation, and the fear that additional books would show up. Preliminary question: did we reasonably believe that other law libraries, agencies and firms that ordered this publication may have received further publications under the same circumstances? If there was a pattern, was that a problem?
One reason to act: the company was a Florida company. They opened an investigation and issued a subpoena.
Florida law: To send unordered merchandise, there must be a clear and conspicuous notice that it’s a gift with no additional obligation. The invoice had tiny print indicating that future merchandise would be sent on a 30-day trial basis, disclosing the practice of “automatic updating.” So the disclosure was there in reasonably easy-to-understand language, but it was in mouseprint on a place on the invoice the library was unlikely to read. Is this “unordered merchandise”? The FTC calls this a “negative option” plan, which is common in library purchases—consumers have the obligation to reject goods/services; failure to reject is treated as acceptance of offer. The first negative option plans were book and record clubs. 1970s saw so many abuses that the FTC considered an absolute ban, but concluded that there was enough benefit to allow them with strict regulation. (Turns out the FTC is currently seeking public comment on the negative option rule.) Now libraries use subscription services/supplementation plans/continuity plans/automatic renewals/free-to-pay conversion or trial offers.
We know that prenotification negative option is lawful because of the FTC rule, but what about other types of plans? The FTC said in 1998 that continuity plans and others are lawful if, prior to sending goods or service, the vendor clearly and conspicuously discloses all the important terms, including that the consumer agrees that failure to reject goods/services may be treated as acceptance. Consumers must agree to the terms and conditions.
Clear and conspicuous: are the terms readily noticeable and reasonably understandable? Told a funny war story about opposing counsel asking consumer to read the contract in a different case; consumer says ‘I can see the words, but I can’t read them,’ and counsel asks ‘Do you have a magnifying glass?’ Hint: that’s not clear and conspicuous. FTC guidelines: placement, proximity, presentation (including being free of distractions) and prominence. Prechecked box with hyperlink to terms & conditions is probably not meaningful acceptance. 1976-2000: FTC had specific guides for legal publishers; rescinded because FTC concluded that general principles of unfair practices should apply, and there was no reason to single out legal publishing.
Brief checklist: was an order placed for this specific publication/service? Is it part of a negative option plan? Is it a gift? If the publisher says it’s negative option, did you agree? Were the terms and conditions disclosed, clearly and conspicuously? If yes, it’s lawful, but if not, it could well be unordered merchandise.
Thompson claimed to comply with all applicable laws, but said it wanted to be clearer and serve customers better, so worked together to improve the negative option.
After this, the AG looked at other legal publishing agreements, like Matthew Bender’s. They also needed disclosure improvements. Agreed to put modifications in place nationwide, including monitoring and compliance reporting requirements. Thompson agreed to offer refunds nationwide. Matthew Bender & Lexis-Nexis limited their refunds to Florida consumers. The companies also paid attorneys’ fees and costs to the AG.
New ads: much more prominent disclosures, and clear option to enroll in automatic shipment if you affirmatively check a box.
If you’re concerned, talk to people in the company—not the sales reps, who may not be the right people. Publishers are often eager to improve customer relationships. You can also file complaints with the FTC online and with state AGs.
Rieger: when you get something, don’t just send it back. Keep a record, tell others, talk to AALL, give AALL’s guide to fair practices in legal publishing to staff, especially staff who open the mail/pay the invoices. Complain to your state AG. We are drafting comments to the FTC as part of its request for comments on negative option.
Q: What about foreign vendors? One of our vendors sends multiple books, and the cost of returning it is so large it’s cheaper just to pay; we say don’t send these but they keep doing it.
Furlow: If these practices are violations of law, they violate the law in your state. Might want to get legal advice about whether you can just keep the publications. Practically, may be hard to enforce, but maybe the AG can help.
Q: If an organization takes a stance against a particular vendor, is there a risk of an illegal boycott?
Furlow: that’s not her area—counsel needs to answer that.
Stupski: There’s nothing stopping us from using informal channels, asking each other about our experiences.
Rieger: Right now we have a great opportunity to contact the FTC in the course of its review of the negative option rule, and the AALL is behind that.
Comment from someone working on comments to the FTC: We do think the rule should be extended to programs related to negative option programs. Question: do we want to put a deadline on these programs? If your predecessor agreed to a plan ten years ago, you may no longer have a record of the agreement—so does there need to be an expiration date after which at least the terms have to be clearly and conspicuously agreed to by the consumer? We also need to investigate what constitutes agreement by the consumer.
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