

How AOL is Stealing Billions From Our Parents - fvryan
http://fvryan.com/?p=114
How AOL is Stealing Billions From Our Parents through dial up fee skimming.
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jdietrich
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.

~~~
georgemcbay
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.

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fvryan
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.

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Afton
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.

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mattm
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.

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fanboy123
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._

~~~
fvryan
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.

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

~~~
j79
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...)

