Ethics in Business: Silence is a Sign of Approval!

In today’s world, consumers are constantly bombarded with marketing promotions, gimmicks and subscriptions that companies use as a tool to gain a greater market share and obviously lock in more consumers into their network. While some companies do it the traditional way by sending promotion material either in print or by presenting it on the internet, there are a lot more companies that seem to adopt a shady version of it that I call the “silent parasite”.

The “silent parasite” is a tool that companies seem to use to attract an unwilling consumer to their network through some means and then hold on to the consumer forever assuming that he/she has accepted their presence. Mostly the “means” end up being a free offering or subscription that eventually turns out into a trap laid by the company to grow its customer network.

A typical example of this was one that I had faced with the, way back when it started and before it changed some of its practices later on. When this site initially began, nobody knew who started this site, but it launched a pretty heavy ad campaign to promote the idea that your credit report is for free. When I signed up for the free report, I was led to believe that I was entering credit card details so that my identity could be verified. Without a clear indication of what was in store, I did manage to get my free report and was happy that I didn’t have to access the monopolistic ring of the the three leading credit agencies to get a report that talks about my credit worthiness. What I wasn’t aware of was that I had also automatically signed myself into being charged a monthly fee to get some regular updates on my credit report because I somehow did not disapprove the idea of being charged in the first place! After a few credit card bills that showed money being siphoned off account, I eventually had to call them up to cancel my “subscription”. I soon realized I wasn’t alone in this silent approval trickery. Consumers immediately exposed the fact that this site belonged to one of the three large credit agencies-Experian. Also, the fine print that was possibly concealed well enough was also exposed and the site received some flak. Soon, the website was revamped and as you can see the current version today, it not only shows clearly that it is an Experian company but it also has a clearly highlighted “important information” section in the home page that warns that not canceling the free membership within 7 days automatically implies subscription to a monthly fee based program.

This company is not alone in sucking customers through this trick. Several companies often have these clauses showing up in fine print- a practice I think gives businesses a legal option to smartly whip the unsuspecting consumer. How many times do you think consumers get to read fine prints in the first place, and read and understand the Shakespearean language used to explain what the consumer is getting into in the second place? Assuming that the law requires even consumers to be smart enough to look around, identify and understand what they are getting into, the bigger question is how can businesses assume that since a consumer did not say no to something that they imagined the consumer will say “yes” to, the consumer has in effect authorized to part with their money?

Magazine/newspaper companies are also a good example of a place where such practices are common. Don’t stop a free subscription and you will automatically be billed from the time the freebie ends. Why this trick works for businesses is because of the nature of human behavior when it is influenced by time and space. This is the fuel to the marketer’s promotional instincts that guarantees that a consumer in a large number of cases does not reject something once he is knee deep into it.

To explain this further, we need to understand how people behave. A majority of us are not the kind of people who maintain a strict regimen in life. A life that is filled with a time bound activity of what all needs to be tracked and completed in the future. A good amount of people who are of that kind are mostly those who tend to track and complete activities of prime importance for them. That is where, the marketing programs of businesses seep in through the cracks. Given the growing responsibilities of the average human being, it is becoming largely difficult for them to keep track of every event that they participate in or every action that they have taken in the past, which has a future implication that is strictly time bound. How many times can a consumer remember that before the seventh day from today, she needs to call to cancel an automatic subscription that will immediately sign her up for a fee-based subscription??

Companies are smart enough to understand this human dilemma- a general disposition towards laziness when it comes to remembering a particular time in the future to carry out a series of not so familiar non-daily actions to prevent themselves from getting into something that they are not in approval of to begin with. As one can see, none of these “silent approval” programs have an easy way for the consumer to one: pre-cancel a membership/subscription while signing up for something free and two: post-cancel a membership/subscription through the click of a button, the same easy means by which the consumer signed up in the first place. These cancellations are largely done when the consumer ends up calling a 800 number and wait for some time before they end talking with an agent to get rid of the parasite. In my opinion, what companies I believe have realized is the economic benefit that comes with this trivial human nature.

If captures 1000 consumers, who do not wish to hold on to their subscriptions to end up paying for it, the company has a computer based time bomb ticking away and waiting for day 7 (0 hours o minutes 0 seconds) to pounce upon them. Assuming that a rare 95% of these consumers called in to cancel their subscription, it leaves the remaining 5% of consumers who are still exposed to this parasite. Given that the monthly subscription is $15, 50 unwilling consumers end up registering $750 into the companies bank account. This is free money for the company that no consumer can claim as lost through any legal means. If this continues for another month, the company pockets $1500 of free money. By scaling up these numbers, one can imagine the kind of free money that a company can make by simply taking advantage of the principle that “silence is a sign of approval”!


1 thought on “Ethics in Business: Silence is a Sign of Approval!”

  1. Your blog keeps getting better and better! Your older articles are not as good as newer ones you have a lot more creativity and originality now keep it up!

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