The Worst Cancellation Policy on the Internet
June 22 2014 · Steve Benjamins
I’d like to introduce you to 1&1. If you haven’t heard of them before, they’re the SaaS company that spends approximately $160m / annually on advertising (primarily television) for a website builder called My Website.
They also have one of the worst cancellation policies I’ve ever seen.
Designed to disorient and trap customers, it seems to operate at the legal limits of consumer protection laws and in my case, may have even overstepped them.
Let me explain what happened to me this week.
Context: I’ve spent the morning signing up for and trying My Website and now I’d like to cancel. Luckily 1&1 offers a 30 day trial, so cancelling shouldn’t be a problem. Unfortunately, they required my credit card on signup, so I’m a bit concerned.
1. I hit cancellation in in the My Website control panel.
2. I select the product I’d like to cancel.
Note: Strange. Why is the product listed under tariff? I’ll give 1&1 the benefit of the doubt and assume they’re not purposefully trying to disorient me.
3. I arrive at a page where, unfortunately, the Cancel this Contract option is disabled.
After reading this ambiguous paragraph a few times I decide that I need to turn off auto-renewal in order to enable the Cancel this Contract option.
4. I turn off auto-renewal and am instructed to sit-tight for a 3 minutes for the change to take place..
5. I wait two hours and realize there is actually no way to cancel the contract online.
It turns out turning off auto-renewal doesn’t enable the cancellation option. Later I’ll find out that there is no way to enable the cancellation option.
I start to feel like I’m in an impossible Zelda dungeon trying to figure out how to activate the door to the dungeon boss.
6. I call 1&1 phone support to cancel.
I get in touch with a customer service agent and tell him I’d like to cancel the product. He says,
“you’ve only had the product for a day, do you really like think you’ve given a fair try?”
I tell him flatly that their product is really bad. (and it is)
Then I ask him why I have to call in to cancel the account. He deadpans,
“that’s just the way the system works.”
Later, I’ll kick myself for not asking him well if that’s the way the system works then why do you have an online cancellation process?!
After a few more questions he cancels the My Website product and I receive an email confirming the cancellation. I breathe a sigh of relief and think: whew! Glad that’s over.
Here’s where it goes from bad to is this in violation of consumer protection laws?
I wake up, check my email and am surprised to see an invoice from 1&1:
What the hell!? I cancelled my product on Thursday. Why would I be receiving an invoice?!
So once again I have to call up 1&1.
I explain the situation to my customer service agent. She confirms that my account was successfully cancelled on Thursday.
“If that’s the case,” I ask her, “why did I receive an invoice this morning?” She explains that,
“sometimes the system generates crazy invoices.”
Crazy invoices? Youtube comments are crazy. Skateboard tricks are crazy. SaaS invoices should never be crazy. Then she says:
“But don’t worry because now you won’t be charged.”
Won’t be charged now? What does she mean? I hesitate and think about how to ask my next question. Then I ask, “So was I going to be charged even though I cancelled my product on Thursday?” She confirms my suspicion:
“Yes, if you hadn’t called in you would have been charged.”
1&1 Customers are Desperate and Upset
The complaints I receive about 1&1 from readers are all the same: desperate stories about a terrible cancellation process and aggressive collection agencies. Here’s a few examples from around the web:
Here is 1&1’s strategy, as best as I can tell: herd customers into their ecosystem through relentless advertising and then try to lock the doors so customers can’t leave.
1&1 had almost $2 billion in revenue in 2010. So maybe this strategy is great from a business standpoint. I don’t know. All I can tell you is that from a customers point of view, it sucks.
So, congratulations 1&1: you’ve managed to create a marketing machine that generates enormous revenue while simultaneously shitting on your customers.