Symantec, McAfee To Pay $750,000 In Subscription Renewal Settlement

The $750,000 penalty was issued as part of a combined settlement after Symantec and McAfee were found to have renewed consumers' software subscriptions without their knowledge or authorization. Under the terms of the settlement, both Symantec and McAfee will have to make detailed disclosures to consumers about subscription terms and renewals, and each will be required to pay $375,000 in penalties and costs.

"Companies cannot play hide the ball when it comes to the fees consumers are being charged. Consumers have a right to know what they are paying, especially when they are unwittingly agreeing to renewal fees that will not appear on their credit card bill for months," said New York Attorney General Andrew Cuomo in a statement. "Symantec and McAfee -- two of the nations' largest vendors of computer security software -- will now have to be clear and up-front with their customers when it comes to renewal fees. In other words, no more hide the ball with renewal fees."

An extensive investigation, conducted by the New York attorney general's office, found that both McAfee and Symantec failed to adequately disclose to consumers that subscriptions would be automatically renewed, and that they would be charged for subsequent renewals. The investigation revealed that information about automatic renewal charges was not clearly disclosed, but instead hidden at the bottom of long Web pages or in the fine print of licensing agreements. The investigation also determined that security companies made it difficult for consumers to contact the companies to cancel automatic subscriptions or request refunds for unauthorized credit card charges.

Symantec said the company was working to improve its processes and that it would comply with the terms of the settlement.

"We have worked hard over the last two years to improve our auto-renewal subscription process to make it more transparent and visible for our customers. We have improved our disclosures to ensure that the auto-renewal process is clear to our customers, specifically making the ability to opt out of the auto-renewal feature more clear and accessible," Symantec said in a statement. Customer service is our top priority and we will continue to look for opportunities to improve our auto-renewal process and make it as user-friendly as possible for our customers."

McAfee also issued a statement defending its auto-renewal policies, also promising to comply with the New York attorney general's agreement.

"Auto-renewal is critical for customers; even a short, unintentional lapse could result in irreversible damage or irretrievable data loss," said Mark Cochran, McAfee general counsel and executive vice president. "McAfee began working with the NYAG approximately two years ago to clarify its auto-renewal policies. The company has fully cooperated with the NYAG and has also voluntarily implemented a number of enhancements to its auto-renewal program. McAfee will also be making it easier for consumers to opt-out of auto-renewal on McAfee's Web site, will further clarify the subscription duration and disclosure of its auto-renewal program."

The investigation was brought about after the New York attorney general's office received complaints from the companies' consumer customers who had bought Symantec and McAfee software online but later found that their credit cards were charged for subscription renewals without their knowledge.

Consequently, Symantec and McAfee will be required to clearly disclose to consumers any automatic renewal program and provide an easy, transparent and automatic means for customers to opt out of a renewal. The companies will also be required to provide electronic notification to consumers before and after subscription renewals, and will provide refunds to consumers who request them within 60 days of being charged. The settlement also mandates that the companies will clearly disclose any length of time that they will continue to support and provide updates to purchased software.

Symantec and McAfee are the world's largest and second-largest security software vendors, respectively, offering software to combat threats such as viruses, Trojans, spam and spyware. Customers who buy Symantec or McAfee software are entitled to a limited software "subscription," usually for a one-year period. After the time expires, customers are required to renew their subscription in order to be updated with the latest software.