Rogue sellers are sneaky and creative

Folio: magazine carries an interesting story about rogue subscription sellers. Among the points Bridget Wells makes is that, while such transients (who sell subs at unauthorized cut rates and then remit a tiny fraction to the publishers, who have to fulfill the subs at a loss) are relatively easy to find, by seeding lists and other devices, they are hard to shut down.

Wells, formerly Hearst’s director of partnership marketing, agency and ABC services, and currently managing member, The Subscription Source, says that there are thousands of sellers out there. Most are not directly authorized, and some do not work with an authorized clearing agent. Illegal agents often pick up and move their operations, whether a Web site or Post Office box, in the weeks that it takes to wait for an order to make its way through the system.

"One circulator at a major consumer magazine, who requested to remain an undisclosed source due to pending legal activity, recommends careful screening of list orders. Rogue agents have become particularly savvy in this area, often bold enough to assume the identity of a legitimate company to gain access to subscriber files.

"There are, however, red flags that pop up when fraudulent list orders come in. Illegal sellers, uninterested in mailing to anyone but magazine subscribers, have an inherent attraction to magazine lists. “I test every new mailer,” says the source. “The key is who is the mailer? What other lists are they renting? If they’re only renting publishing files, that’s a red flag.”

Customers will often recognize phony sub or renewal offers, especially when a legitimate renewal bill follows a phony one that the customer already paid, she said. "Make your fulfillment house and customer-service team aware that you’re interested in seeing any complaints linked to phony subscription-related mailings. Isolate these complaints and contact the customer directly to examine any previous or upcoming correspondence."

Renewal offers are where the real revenue impact is, says Dawn Russo, founder of consulting firm Subscription Integrity Services. “That’s where publishers are losing revenue,” she adds. “Agents are jumping on the renewals before the publishers are getting them.”

Taking legal action is the real issue. “Publishers are doing what they can do,” says Wells. “Tracking is not the problem. You have to take action. And that’s the problem. Publishers don’t have the wherewithal.” Action, according to Wells, goes beyond simply denying an agent your business. “Cutting off one rogue seller is like putting a band aid on a staph infection,” she says.