Microsoft’s Sleazy XBox Live Autorenewal Credit Card Scam

Yesterday I got my AMEX bill. I noticed on there that there was a charge for $59.99 to Microsoft for XBox Live Gold Renewal.

I’ve been really happy about being able to dump Microsoft’s crappy XBox 360 Netflix tax (they charge you $59.99 per year in order to stream your already paid for Netflix to your XBox 360) ever since buying an Apple TV in December (which streams your XBox 360 for free).

I wasn’t aware that Microsoft was going to autorenew me and charge my credit card, so today, the day after I got my credit card bill, I called Microsoft to ask why they’d autorenewed me without my authorization and to see if I could have the charge reversed out. (I’ve streamed no Netflix movies on the XBox 360 by the way since the auto renewal date in Jan).

First before I called Microsoft I tried to see if I could figure things out online myself. I tried to go to my Windows Live account to look into it but was told that it had been temporarily “blocked.” According to the page “Someone may have used your account to send out a lot of junk messages or done something else that violates the Windows Live Terms of Service.” They wanted my cell phone number to unblock it and so I just said screw it and called Microsoft.

After screwing around with the standard push 2 for this and 1 for that and 3 for this I finally got a real person. I explained to this person calmly and politely about the charge and asked her if she’d reverse it for me and make sure the account was closed. After about 5 minutes with her it was determined that she did not have the authority to do this and that I was going to need to go to some other department. Fine.

So the next guy I got first tried to talk me out of canceling. Do you like “sports” he asked? No, I answered back. These sort of questions went on for a while until he finally offered to renew me at the price of $44.99 instead of the $59.99.

I explained to him that the only reason I had the live account in the first place was to stream Netflix and that now that i could do that for free on AppleTV and the wii that I didn’t need this anymore he finally agreed that there was nothing that XBox Live Gold really offered me that I wanted or used and began the process of trying to help me with a refund.

I explained to this guy that 1. I wasn’t aware that I was on autorenewel. That 2. I hadn’t used the service at all since it “autorenewed.” and 3. that I just got my bill yesterday and called as soon as I saw the charge.

He explained to me that the autorenewal thing was part of the EULA I’d agreed to and so it was in fact authorized. Ok, whatever. He also told me that Microsoft sent me an email (which maybe they did but I never got it. I could have inadvertently deleted it or it could have gone to spam or who knows). But one thing he wouldn’t/couldn’t do was offer me a refund.

Instead he suggested that he cancel my one year account, resign me up for a month to month service. That I could then call back tomorrow to cancel the month to month service and I’d only have to pay $23 instead of the $59.99.

I told him that I found this unacceptable and that I called as soon as I’d seen this charge and that I thought it was deceptive for them to hide an autorenew clause in the EULA. We went round and round about this for a bit until he said look I’d like to be able to refund you, really I would, but the system just won’t let me.

At that point I asked to talk to the next level of supervisor up. He told me that I could wait if I wanted but that it was going to be a waste of time and that he was just going to tell me the same thing.

I decided to “waste my time” anyways and talked to the next level up guy. He examined the situation, repeated a bit of what the other guy told me and finally agreed to help me cancel my account without having to call back the next day. He said he was going to charge me $7 though. I’m not quite sure why but I said sure go ahead.

So now I’m officially off of XBox Live. And it only cost me about $7 and an hour of my time. At least I got a blog post out of it.

Personally I think it’s sleazy for Microsoft to hide autorenewal stuff in an EULA. But if they are going to do this and somebody calls the day after they get their bill, they should at least agree to refund them 100% of their money and without all the hassle that I had to go through to get a partial refund.

I’m glad to be done with Microsoft though finally. I moved my Windows phone to an iPhone and then Android phone. I’ve moved my families 3 PCs to Macs. And now I’m finally done with the XBox and can stream Netflix for free now on our wii or AppleTV.

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20 comments on “Microsoft’s Sleazy XBox Live Autorenewal Credit Card Scam
  1. While I am pissed off you had a bad customer service experience, isn’t it an Xbox Live Subscription?

    If I subscribe to a magazine, the responsibility is on me to cancel my subscription. If I have cable, I have to ring and cancel the service or they will keep charging.

    I would hardly call it a scam. It’s a shitty experience (they should have given a full refund within a certain period of time like 7 days) but I have always understood Xbox Live to be an ongoing subscription.

  2. Thomas Hawk says:

    Johnny I didn’t really see it that way I guess. I think they call it a “membership” rather than a subscription, but at least the one year version is typically marketed as just that, one year of service.

    http://www.walmart.com/ip/Xbox-12-Month-Gold-Card/11070919

    But whatever the case with the semantics, if I didn’t use the service at all during the time period they should give a full refund. If I had a magazine subscription and never received any magazines I’d expect a full refund as well.

  3. Ahh, here in Oz they market it as a subscription. That is very confusing and i can see where the confusion would come in.

    And I agree regarding the refund. They should take a leaf out of Amazon. I signed up for the Amazon Prime trial but was away when it came time to choose yes or no. My credit card was charged. I got onto Amazon 3 days later and because I hadn’t bought anything with Prime shipping, I got a full refund.

    You might want to hit up Larry Hryb @majornelson or http://majornelson.com/ He is the Director of Programming for Xbox Live and is one of their public faces

  4. Rene says:

    I found this out the hard way as well. I no longer use a credit card for anything on Xbox Live. I buy the prepaid cards for the service as well as points.

  5. Denny Wells says:

    I feel your pain – we had the same issue about 10 years ago with the then-current incarnation of msn/hotmail. We moved to Thailand with the Peace Corps, couldn’t use their US-only subscription, so we cancelled. Except it didn’t cancel.

    After several months of online support sessions, calls to free & non-free numbers, and physically mailed correspondence, our subscription was finally cancelled and the monthly bill quit hitting our credit card…. Until the 1st anniversary of our subscription, at which point they started billing again. At that point, we gave up on microsoft and went straight to our credit card company. We challenged the charge as fraudulent, and changed our credit card numbers.

    Watch out for your next renewal anniversary – make sure they don’t try to charge you again in 2012. And good luck!

  6. Rob-L says:

    You’ve slanted this story a bit. First, Xbox charges $59.99 for Xbox Live, streaming Netflix is just one of the services that comes with Xbox live. Stating that MS charges you 59.99 to stream Netflix is misleading. The Xbox Live service was around years before they offered Netflix, ESPN, etc.

    Also, the auto-renewal being added to the EULA was all over the internet and I also received the email from MS that you mentioned in your post. As soon as I got it, I opted out.

    I do agree that it’s shady that MS tried to convince once you to stay subscribed once stated you wanted to stop your subscription. I hate it when any company tries that crap.

  7. Jason says:

    Prepare to go through this process with Apple soon. Apple is going to soon be charging Netflix 30% of their subscription prices because Netflix streams to iOS devices. This cost will have to be passed on by Netflix to the consumer. I’m sure this “Apple Tax” will eventually be imposed upon content streamed to OSX apps and Apple TV. So you’ll just end up paying Apple instead of Microsoft for the pleasure of streaming your Netflix.

  8. Joe says:

    This is why God invented chargebacks — just call your credit card company and be done with it.

    Might be a bit late at this point, though. Not sure what would happen if you charged back the $7 fee; I think it’s likely it’d end up in collections, but I’m not sure who would bother coming after you for seven bucks.

  9. Aaron says:

    Rob and Jason, that is correct, Netflix is just one of many services on Xbox live and more are coming. So on Apple TV you will pay plus get Netflix HD at a lower resolution. Nice switch Thomas.

  10. Thomas Hawk says:

    Aaron, I’m not paying on AppleTV for Netflix right now. I guess I’ll wait to see if they do in fact start charging me to use it in the future. If they do though, somehow I doubt they are going to gouge me for $59,99 per year like Microsoft does. Could be wrong though. Of course I’ve got a wii too which streams Netflix for free as well. Plus the Apple product works better than the XBox 360 did for consuming media as an extender device and iTunes works quite a bit better than Windows Media Player did for my large digital library, so at least for now I think the decision to move away from Microsoft was a good one.

  11. Ryan says:

    While I feel your pain on much of your bad customer service experience, this is a bit like buying a top of the line DSLR and complaining about the output you’re getting from the kit lens and built-in flash. The Xbox Live service has always been targeted principally at gamers who benefit from the online multiplayer and additional games and content. I’ve always thought of the other features offered through the service as cool extras. I also think the service is a great value compared to the time/frustration I used to put into keeping PC games patched and running on a finicky gaming machine.

    I also recall that I get two emails each year when I renew. One notifying me about a month beforehand and one when the charge posts. I’m personally a fan of auto-pay bills and auto-renewals, but I keep pretty close tabs on all my service subscriptions (and have very few). I think in a situation like yours good corporate policy definitely cuts toward helping the customer out.

  12. Duluk says:

    I love when customer service reps say, “Well you can talk to my supervisor if you want but there is nothing ‘they’ can do about it either.” I had that happen with Adorama, who did some silly charge splitting on a large order and tried to use the same bank authorization code on two separate days. It didn’t work. The rep called the bank; they said she couldn’t re-use the authorization code. So the rep told me I would have to wait 3 days for the bank to clear the charge, then they would re-charge and ship. I replied, “No. I need the name and number of your supervisor.” She said, “Well, there’s nothing she can do about it – this is how the banking system works, but if you still want to, her name and number are …” So I called. Within 15 minutes the supervisor called the bank and had the charges cleared and re-charged correctly and shipped that day.

    So yeah, don’t listen to service reps who are too proud to admit someone else might be able to do something they can’t.

  13. Duncan says:

    I lucked out and didn’t get caught by this… but only because my cc expired.

  14. Helen Oster says:

    @ Duluk

    I was concerned to read your comment and would firstly like to apologize for the inconvenience and frustration that was caused.

    Without additional information I’m unable to ID your order, but please do email me directly: HelenO@adorama.com, with your order number. Once I have identified your purchase and which CS rep assisted you, her sales manager will review the response you were given initially.

    Helen Oster ☺
    Adorama Camera Customer Service Ambassador

    http://twitter.com/HelenOster

  15. Thiago says:

    What pisses me off the most is the duality of the process. You can turn on your Xbox, and sign up for an Xbox Live membership from your console, in a few minutes. But to cancel it, you have to call, listen to multitudes of options, wait, talk to a robotic retard, confirm your date of birth, favorite food and underwear size, and then get it canceled.

    “Sign up” and “cancel” should be two options, side by side, on the same effin console/web interface.

  16. Adam says:

    The “scam” is in the fact that you cannot cancel on the website. I think its bad business to restrict your customers access renewing/canceling their accounts.

  17. Dan says:

    Microsoft is trying to charge my expired credit card, and from what I can tell it’s impossible to delete my credit card or turn off autorenewal. I can press delete credit card but it always gives me a reason why I can’t. The 2 options include, updating with a new credit card that will be auto charged. Or turn off auto renewal. I’ve spent an hour looking at billing and it’s just not possible!!!! There is no way to turn off auto renewal, on the console or on xbox live. I did sign on 2 days before it expired to check if there was options, and it asked if I’d like to autorenew, I picked NO. IMO they just stole my credit card information and are criminals using my numbers to make transactions I did not authorize.

  18. Guy says:

    I find it funny that we cannot CANCEL an auto-renewal from the website. They hide behind the excuse of “identity and credit card verification issues”. If I used someone else’s credit card, it would not be an issue for them if I CANCELED a subscription but to CONTINUE OR CREATE ONE!!! They are just money hungry bastards, also disencouraging us to cancel by getting rid of all convenience and making us go through the hassle of calling up Microsoft’s infamously horrible customer support and raising the subscription cost accordingly for all subs.

    Not to mention the automatic renewal decides you would most likely prefer the most least efficient and occuring sub on the list, right?

    But yes the scam is ultimately in getting rid of all methods of cancelling but through phone.

  19. trustfulone says:

    I didn’t even go on my xbox and I didn’t have a subscription and I was charged $99.99 for a year and $74.99 for 6000 points neither which I purchased. They tell me that they will reverse fee for the subscription I didn’t purchase but need to look into the 6000 points which they said were not spent. I don’t get it. You are willing to reverse one but investigate the other. By the way they still havent reversed the subscription.
    So I have my bank reversing it as fraud.