Netflix to Settle Class Action Suit

Netflix anticipates settling a consumer class action lawsuit over false advertising claims. The case, Frank Chavez v. Netflix, et al., was filed on September 23, 2004 in the California Superior Court, City and County of San Francisco on the grounds of false advertising, unfair and deceptive trade practices, breach of contract and other claims relating to Netflix’s statements regarding DVD delivery times.

Netflix has not officially admitted wrongdoing but is expected to settle the case for $3 to $4 million.

Current and former Netflix subscribers in other parts of the country who suspect Netflix of fraud and wish to file lawsuits are advised to consult their local attorneys.

Canceling Your Netflix Subscription

The two happiest days of your Netflix membership are the day you begin your subscription and the day you end your subscription. There is an ugly and unexpected twist to this, however. A surprising number of former Netflix subscribers have reported that after they canceled their memberships, Netflix denied receiving their final DVD returns.

When Netflix denies receiving a returned DVD from a customer who has recently canceled, Netflix charges the former customer’s credit card for that DVD. This practice exposes the former customer to dozens of dollars in additional charges after their subscription has ended. Unfortunately, the former customer is left holding the bag and has the burden of proving that the “missing” DVDs were actually returned.

If you want to cancel your Netflix subscription and minimize your exposure to additional charges, consider following the steps below.

1. Determine your billing date by viewing your account information on Netflix’s Web site. Since Netflix cancellations are immediate and Netflix does not give refunds for partial months, you should plan to cancel shortly before your next billing date.
2. Several days before you cancel your Netflix subscription, delete every DVD from your queue. This should prevent Netflix from shipping more DVDs to you.
3. Send all of your DVDs back to Netflix. (Consider taking the extra precaution of sending these DVDs certified mail. Include a brief letter detailing the exact contents of the envelope. Keep copies of all documentation.)
4. As Netflix notifies you of receipt of returned DVDs, save the notification emails in case you need them later for proof.
5. The day you intend to cancel your subscription, check your account to see which DVDs have not been checked in by Netflix. Report any outstanding DVDs as lost. This should completely clear your queue.
6. Send an email to Netflix informing them that you are canceling your membership. This will create more of a paper trail. (Note: Do not tell Netflix that you are canceling because you were not getting enough DVDs. Netflix loves when heavy users cancel.)
7. Cancel your subscription using the Netflix Web site. Make sure to follow the on-screen instructions carefully.
8. Sit back in your chair, grin, and enjoy a beverage of your choice as you celebrate the end of the dysfunctional relationship you had with that company.

The main drawback to this cancellation procedure is that you will loose about a week’s worth of DVD rentals. Unfortunately, if you want to minimize the chances of getting hit with extra charges from Netflix after you cancel, you have very few options.

After you have canceled, carefully check your credit card statements. If Netflix still charges your credit card for missing DVDs (or any other unjustified charges), immediately contact Netflix via email to dispute the problem. If Netflix does not fully credit the unjustified charges to your credit card, contact your credit card company and dispute the charges. In many circumstances, your credit card company will reverse the charges.

Nearest Netflix Shipping Facility

The "Nearest Netflix Shipping Facility" issue seems to be affecting a growing number of Netflix subscribers. Manuel’s Netflix Journal has been researching this story for weeks. If you have fallen victim to the "Nearest Netflix Shipping Facility" tactic, learn what you can do about it at www.manuelsweb.com/netflixjournal5.htm#nearest9.

Does Netflix Manage Earnings?

On July 27, 2005, Herb Greenberg at MarketWatch ran an interesting article about Netflix’s financial numbers. What is your opinion on this information?

"Does Netflix 'Manage' Earnings?"

Thanks to, Netflix Undergrounder, Zach Smart for initiating the new discussion on Netflix’s financials.

Boston Globe Silent on Netflix Throttling

Today, The Boston Globe ran a story about the DVD-by-mail industry. While the article includes a lot of information, it fails to mention anything about Netflix’s practice of throttling.

You can read Bruce Mohl’s story at the link below. If you think Bruce Mohl left out some important details about the way Netflix operates, please email him about your experiences with the company and politely request that he write a follow-up story on Netflix.

Regular Netflix Underground readers will remember that David Pogue with The New York Times made a similar omission in March. Due, in large part, to your contacts with David Poque, The New York Times ran a follow-up story that mentioned Netflix’s practice of throttling. Perhaps, Bruce Mohl by will set the record straight in The Boston Globe once he has all of the facts.

The Boston Globe Story
"Customers Win in War of Online DVD Rental Firms"

Bruce Mohl at The Boston Globe
mohl@globe.com

Spamalot: The Land of Netflix Solicitations

If you are currently a Netflix subscriber, you have the distinct pleasure of receiving unsolicited Netflix marketing emails. These emails encourage you to upgrade to more expensive plans, market Netflix to your friends and family, etc. These emails can be annoying, but Netflix can justify sending them out by classifying them as "subscriber benefits."

If you cancel your Netflix subscription, you’ll be surprised to discover that Netflix does not stop sending marketing emails to you. This spam is basically a series of messages begging you to come back to Netflix. A new invitation to rejoin will probably arrive in your mailbox every few weeks.

The fact that Netflix is using non-subscriber contact information for sales purposes is bad enough, but the really insulting element is the content of the messages. Like a lot of spam, these emails are misleading. For example, Netflix might imply that they have made improvements that will get DVDs to you faster. They might offer you their cheapest, most basic plan but give you the impression you are eligible for a special discount on your previous plan. Netflix will attempt to woo you back with numerous ploys, but be aware that generally Netflix will not offer anything to you that isn’t available to the general public. (Most likely, Netflix makes exceptions for former subscribers who rented few DVDs and were therefore highly profitable.)

If Netflix is spamming you, report them to your Internet service provider. Most ISPs make reporting spam very easy. All you have to do is flag the message as junk mail when it arrives in your mailbox. If this does not fix the spam problem, you will need to manually unsubscribe from Netflix’s mailing list.

Netflix Admits Plan Limits (Well, Sort Of)

On June 1, 2005, Manuel’s Netflix Journal reported what seems to be an indication that Netflix is beginning to subtly admit the limits of their unlimited rental plans.

Netflix’s Terms of Service now states, "Most of our subscribers rent between 3-11 movies per month." This somewhat ambiguous and non-committal statement is far from a confession, but at least Netflix is giving customers a hint they may be disappointed if they hope to watch more than eleven DVDs per month on a three-out plan.

Perhaps Netflix is feeling the heat from outraged customers, or maybe Netflix is just hedging in case they get hit with lawsuits. Regardless, at least Netflix is giving customers a little more information.