Even if you aren’t old enough to remember the heyday of Columbia House, you’re probably familiar with the scam at its center. The mail-order club would offer customers eight to 12 CDs, tapes, records — and, in later years, DVDs and blu-rays — for a penny. By agreeing to the arrangement, users were signed up for a scheme where they agreed to purchase a certain number of products over a specific amount of time at full price. Each month, they were sent a mailer promoting the “Selection of the Month,” and if the customer failed to return the rejection form, Columbia House would send them the new release and charge their account.
The practice of requiring customers to opt-out or be charged is called negative-option billing, and it inspired no end of complaints from customers. Columbia House drew further claims of bad business by allegedly refusing to acknowledge payments, discounting items so that users’ purchases fell just below the agreed-upon threshold and being a notoriously difficult subscription to terminate.
