| Credit Card Hijacking is the term used when a | | | | traditional subscription based system such as |
| person’s credit card information is | | | | paper magazines where the subscriber has to |
| used for undesired charges for goods or | | | | periodically proactively reauthorize the |
| services where the credit card owner has | | | | subscription, hence the default is to not |
| trouble reaserting control. This can occur in | | | | renew.) The most common subscription exit |
| two major forms. | | | | barrier is to not provide any online |
| | | | subscription cancellation mechanism at all, |
| Credit Card Hijacking by Identity Theft | | | | but to instead require the user to cancel by |
| | | | telephone or by "on-line chats". Such |
| The first form of credit card hijacking is | | | | organizations often add the additional |
| basically identity theft, which is the | | | | barrier of making any subscription |
| deliberate assumption of another person's | | | | cancellation information difficult for the |
| identity. Identity theft is usually the | | | | user to even find, thus creating an |
| result of serious breaches of privacy and | | | | additional delay in the subscription |
| often involves the thief compromising a great | | | | cancellation. This is very common amongst |
| deal of financial and personal information | | | | ISP’s, who know the psychological |
| allowing the thief to open up new credit card | | | | barrier to making the call, which the |
| accounts in the name of the victim. | | | | subscriber anticipates will be unpleasant, is |
| | | | very high. It also allows the marketing |
| Credit Card Hijacking by Cancellation Barrier | | | | organization to talk the subscriber into |
| | | | changing their minds and not cancelling the |
| The second form of credit card hijacking, | | | | subscription. Another common subscription |
| which most people have fallen victim to, is | | | | cancellation barrier is to have a relatively |
| the continued charging of a person’s | | | | long subscription period, a no refund policy, |
| credit card for a subscription to goods or | | | | and to require the user upon cancellation to |
| services no longer desired by the credit card | | | | forfeit all money covering the present |
| owner. This type of credit card hijacking was | | | | subscription period. This is very common |
| pioneered by major ISPs, credit monitoring | | | | amongst online dating services. |
| services and online dating services, is | | | | |
| perfectly legal, and is still common today in | | | | This second form of credit card hijacking was |
| a wide range of subscription based goods and | | | | created by marketers who recognized that |
| services. Credit card hijacking of this type | | | | subscription based services generally have |
| came about as online subscription based | | | | relatively low periodic billings which will |
| marketers realized that traditional | | | | generally go unnoticed on any given credit |
| subscription systems, such as the annual | | | | card statement. So what happens is that long |
| subscriptions that paper magazines use, were | | | | after the user loses interest in the |
| an impediment to enrolling customers. A | | | | subscription, they forget to cancel the |
| typical dial-up ISP, at US$24.95 per month, | | | | subscription and because the periodic billing |
| is US$299.40 annually. By breaking the | | | | is so low, they don’t tend to notice |
| subscription period into small units like | | | | it on their credit card statement. |
| months or quarters, and allowing direct | | | | |
| monthly charging of the subscriber’s | | | | Credit Card Hijacking by Negative Option |
| credit card, the psychological and economic | | | | Billing |
| barriers potential subscribers see are | | | | |
| greatly reduced. | | | | Negative option billing is the practice of |
| | | | sending goods automatically and billing the |
| The issue which makes one subscription system | | | | recipient unless the recipient is proactive |
| a hijacking of the credit card is not the | | | | in declining the goods before they are sent. |
| mode of entry into the subscription nor the | | | | Negative option billing reverses the usual |
| billing interval, but the marketing | | | | direcion of sales transactions. It assumes |
| organization creating barriers for the user | | | | that unless you say 'no', you've agreed to |
| to easily cancel the subscription. | | | | have bought the goods. This is the common |
| Organizations which use credit card hijacking | | | | practice used in book clubs, record clubs, |
| as part of their marketing strategy make | | | | and magazine subscriptions with automatic |
| online registration for the subscription | | | | renewal. Some practitioners of negative |
| easy, enforce default automatic renewal | | | | option billing prefer to call it "advance |
| policies, and create barriers to halting the | | | | consent marketing." |
| subscription. (This is in contrast to | | | | |