How AOL is Stealing Billions From Our Parents | Hacker News Reader

How AOL is Stealing Billions From Our Parents

fvryan.com

10 pointsfvryan11 comments

How AOL is Stealing Billions From Our Parents through dial up fee skimming.

It's just a small part of a much more widespread problem - a hell of a lot of people just don't give a great deal of thought to their outgoings and don't check their bank and credit card statements. Recurring billing is clearly necessary and legitimate, but it's easy to abuse when there are lots of people who just aren't paying attention. The complete absence of financial education doesn't help.

Although I do feel sorry for people who get stuck by this, it really is a first world problem - you have to be very lucky in this world to have enough money to not notice when some of it goes missing.

Yeah, this isn't unique to AOL or even to online subscriptions. A lot of the revenue pulled in by the big chain gyms, for example, is from monthly access fees being pulled from members who haven't been to the gym in months or years and may even have forgotten about the ongoing payment.

Between this situation and the way most companies make it so easy to subscribe (just click here!) and so difficult to cancel (just talk to 5 representatives on the phone, each of who will put you on hold for 20 minutes) I am extremely reluctant to sign up for anything that is vaguely subscription based anymore, but I know I'm probably way in the minority on that so there's still billions to be made here.

Wow, I didn't even think about gym memberships ect, using this as a biz model, but it does make complete sense. People buying memberships on Jan 1 for resolutions and then never going back.

This is a big gym's business model. I've read that the goal is to have around 10% active members.

The other part of the model is to get folks who are active into additional cost classes.

I've heard this as well. If everyone who was a member actually used the gym 3 times a week for an hour, the gym would need to be much, much larger and charge much more.

In effect, all the people who pay but don't use are subsidizing the people that pay and make the most out of the service.

I'm guilty of this. I don't check my statement every month (I try to catch up on Mint at least every 3 though), and I have in the past forgotten to unsubscribe to something and paid a couple of months before realizing it. It's especially easy with online stuff that uses a 3rd party billing service. Even if you read your statements you might confuse what the charge is in reference to.

I love Mint for this exact reason. Very easy to check it regularly to make sure you aren't getting double-charged or over-charged on any of your transactions. A few months back it helped me spot some fraudulent charges on my CC before they even cleared.

Stealing is a strong word. It's just business. It isn't AOL's fault your parents don't know better. BTW if you think that's bad this is still around for your grandparents:

http://www.webtv.net/

In 2005 WebTV was still grossing US$150 million per year in revenue with 65% gross margin.

Hah, I don't disagree. And they aren't going to stop anytime soon.

And from the webtv site "Sorry, MSN TV hardware is no longer available for purchase from Microsoft. Microsoft continues to support the subscription service for existing WebTV and MSN TV customers."

they still support the subscription service.

I wonder how many people on HN have WoW subscriptions they never log into...

Or, gym memberships?

I'm paying nearly 70 bucks a month for a membership I haven't used in over three months! (Mostly job related - 18 hour days leave very little room for the gym...)

I would love if the gym could check my activity and say, "Hi j79, we notice you haven't been her for a while. Your account will be suspended until your next check in..." But, realistically, I know that won't happen any time soon.

I keep telling myself once this project is released, I'll be hitting the gym, so no need to call anyone.

Basically comes down to me being lazy (in more ways than one...)

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