News Media Cos. Permitted Subscription Scam, Class Action Lawsuit Says

Dow Jones & Co., Forbes Inc. and The New York Times Co. have been accused of providing subscription lists to an outside vendor who charged inflated subscription fees, according to a subscription scam class action lawsuit filed Monday in New York federal court.

Plaintiff I. Steven Rabin filed the class action lawsuit on behalf of himself and a putative nationwide Class of people who have been induced to subscribe or renew their subscriptions to The New York Times, Barron’s, The Wall Street Journal or Forbes Magazine by Circulation Billing Services and various related entities. Rabin alleges that Circulation Billing Services obtained the subscription lists without the subscribers’ knowledge or consent.

According to the class action lawsuit, the news media companies provided their subscription lists to Circulation Billing Services, which mailed official-looking renewal notices to subscribers. The notices indicated renewal prices that were higher than the newspapers’ actual renewal fees, the class action lawsuit alleges. When subscribers paid the listed renewal or subscription price, Circulation Billing Services allegedly kept the excess payment, or kept the full payment without providing the subscription that was paid for.

“Defendants were aware of the entities falsely purporting to act on their behalf, but were satisfied that the entities were maintaining their subscription base at no cost to them, so that, with one exception, they failed to notify their subscribers of the scam,” Rabin alleges in his subscription fraud class action lawsuit. Further, Rabin claims that the defendants profit from selling their subscription lists and continue to sell the lists to “fraudsters” such as Circulation Billing Services without notifying their subscribers.

Further, Rabin alleges that the news media companies led subscribers to believe that Circulation Billing Services was a legitimate entity that was authorized to solicit subscription renewals and that the renewal prices were the lowest available. Rabin also claims in the subscription fraud class action lawsuit that he reasonably believed that the renewal notice was actually a bill and that if it was not paid, he would no longer receive the publication. He alleges that the defendants either conspired with or permitted the vendors to charge “exorbitant” rates to renew their subscriptions.

According to the subscription scam class action lawsuit, the news media companies received numerous complaints about Circulation Billing Services’ practices but took no action to stop them and continued to participate in the scam. Rabin notes that Barron’s did issue a warning on Nov. 11, 2013, though he contends that the company had been aware of the alleged scam for years prior to this date.

The class action lawsuit alleges fraud and deceit, negligence, and violations of New York law. Rabin seeks an injunction barring the news media companies from conspiring with outside vendors and a refund of the excess subscription amounts Class Members paid for subscriptions or renewals to the newspapers. He also seeks reasonable costs and expenses, including legal fees.

The plaintiffs are represented by Raymond A. Bragar of Bragar Eagel & Squire PC.

The Subscription Fraud Class Action Lawsuit is Rabin v. The New York Times Co., et al., Case No. 1:14-cv-04498, in the U.S. District Court for the Southern District of New York.