Legislative changes will put retailers and publishers at greater risk of newspaper voucher fraud, the News Media Association (NMA) has warned.
Letters from the NMA last month warned the Digital Markets, Comp-etition and Consumers Bill (DMCCB) passing through parliament allows consumers to cancel subscriptions within 14 days of: purchasing, a reduced-price period ending or annual packages rolling over.
NMA chief executive Owen Meridith wrote: “This could allow consumers who purchase their newspapers with coupons at their local retailers to cancel their subscription contracts directly with publishers and receive refunds, but continue to use the coupons fraudulently.”
He said publishers could lose “significant sums”.
Currently, retailers are unable to check a voucher is linked to a valid subscription.
The Fed warned such a system could place the financial risk of accepting fraudulent vouchers on the retailer.
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Asked if retailers would be protected from having voucher credits rejected, the NMA did not answer. The Fed is due to meet the NMA on 17 October to “stamp out consumer fraud”.
Fed head of news Brian Murphy said: “Our members take vouchers in good faith, with the expectation of being credited without any fuss or fear or losing out, and this must continue.”
Publishers including the Guardian, Daily Mail and the i have already begun switching from paper to PayPoint’s i-movo’s digital vouchers, which can be disabled as soon as a subscription ends.
PayPoint innovation director David Tymm told RN his company had “already discussed the potential impact with different publishers”.
He explained paper voucher books of 90 vouchers are sent to subscribers every 13 weeks. If a subscription is cancelled in this period, Tymm said vouchers are not always returned, meaning “paper vouchers are being used that shouldn’t be”.
The director added: “I hesitate to say it’s fraudulent, as some subscribers may think they are entitled to use them, but the effect is the same.”
As well as providing a potential solution to the NMA’s concerns, Tymm said: “i-movo also has lower overall operational costs and a track record of showing higher subscriber retention rates than paper-based schemes.”
Paul Sinker, NMA head of communications, told RN: “We hope to work with the independent retail industry to explore how we might collaborate to ensure this legislation does not create unnecessary burdens for news media publishers and retailers.”
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