One of the risks acquiring banks perceive with subscription merchant accounts is the risk of hijacking. Hijacking is a common practice is that merchants selling subscription based goods and services use to make it extremely difficult for consumers to cancel the payments.
For example, consumers sign up for a monthly service, such as web hosting, dating services, or online magazines. The terms of the service are that the consumer will continue to be billed automatically. That is, if the consumer does not notify the merchant of cancellation the consumer will continue to be billed month after month.
Once a consumer decides to cancel, locating the way to cancel on the merchant site may be hard. The cancellation policy is buried somewhere in the fine print on an obscure web page. Once located, the consumer is not able to cancel easily on line
The consumer may be forced to cancel by phone or in writing. When calling in to cancel, the consumer is put on hold for long periods of time. If and when the call is ever answered, the consumer may find that the call gets suddenly gets dropped and the consumer has to call back in and begin all over. Or the call may be answered by a foreign call center and the request to cancel is refused.
Another ploy is for the call center to offer inducements for the consumer to continue the service. Even if the consumer refuses, the call center indicates approval and the billing cycles continue.
Some online services have a long subscription period with no refund policies allowed. Even with a cancellation, the consumer is still forced to forfeit all money for the current billing period.
Most subscriptions have relatively low rates in the hopes that a consumer will not pay attention to the small fee the billing statement. If the consumer does decide to cancel, the time to cancel costs more than the bill itself. For example, it may take hours to cancel a $10 per month recurring charge. The frustration level of cancellation is so high, the consumer gives up trying.
