The Federal Trade Commission has charged the operators of dozens of companies with defrauding consumers by pretending to handle subscription renewals for publications including The Denver Post.
More than 375 publications, including The Post, The New York Times and The Wall Street Journal, told the companies to stop and have tried to warn their customers about the fraud.
The scam has been going on since at least 2010 and involves a byzantine web of shell companies owned by people who went by multiple names, the FTC said in its complaint.
In 2014, some Denver Post subscribers received renewal notices from companies such as Publisher’s Billing Exchange, Reader’s Payment Service, Associated Publishers Network and Platinum Subscription Services charging $489.95 for a one-year subscription and promising the lowest price available. In reality, the price was about $200 more than the actual cost of a seven-day print subscription.
According to the FTC, the defendants renewed the subscriptions at the real price and pocketed the difference. The FTC will try to shut down the companies and get back the money consumers lost.
Some consumers told federal investigators when they tried to cancel payment or get refunds from the companies, they found it hard to reach customer service. When they did, they typically received no more than a partial refund or were successful only when they complained to the Better Business Bureau or filed police reports.
The FTC complaint was filed April 27 in U.S. District Court for the District of Oregon, Medford Division.
In 2015, authorities in five states sued some of the same companies named in the FTC complaint.
At the time, The Post’s senior vice president of circulation Bill Reynolds estimated that fewer than 40 subscribers responded to the fake renewal notices. The Post refunded subscribers the amount of money that had been forwarded to the newspaper by the bogus circulation company.
The Wall Street Journal gave out $2.6 million in free subscriptions to about 7,000 readers who were taken in by the scam. American City Business Journals, which owns The Denver Business Journal, estimated its subscribers lost around $120,000 in the alleged scam.