Thursday, March 31, 2011

Ladbrokes charges lame ‘inactivity fee’ to dormant customers

The great lie of the web is that we all “agree to the terms and conditions” when buying or downloading things. Most people don’t bother to look at the T&Cs, much less read them in detail.

As such it is often the case that customers are not aware of certain terms that can come along and bite them on the ass.

A case in point is Ladbrokes Poker, which sent me the following email yesterday:

Ladbrokes inactivity fee

My initial reaction was outrage. That was swiftly followed by utter outrage.

I checked out the Ladbrokes terms and conditions. Here’s the offending clause:

15.3 . If you do not use your account to carry out any betting activity for a period of 12 consecutive months, such account shall be deemed to be inactive (“Inactive Account”).

15.4. Any Inactive Account will be charged an administration fee (the "Inactive Account Fee") in an amount of £2 (or currency equivalent) or 5% of the balance of the account on the date the account becomes an Inactive Account (whichever amount is greater). Subject to clause 15.5, the Inactive Account Fee shall be deducted from the Inactive Account at the end of the day the account becomes an Inactive Account and on the first day of every following calendar month.

15.5. The Inactive Account Fee will be deducted until the earlier of: (1) the account balance being reduced to zero; or (2) the account being reactivated by you using the account to carry out betting activity. In each situation the Inactive Account Fee shall cease to be deducted.

15.6. We reserve the right to close any Inactive Account whose balance has been reduced to zero for a consecutive period of 6 months.

As a persuasion tactic this sucks and is borderline unethical considering that it relates to gambling.

I can see no good reason for charging customers an 'administration' fee for dormancy. Terminating dormant customer accounts might be a smart idea, as far as data cleansing is concerned, though that assumes that they cannot be reactivated. But this isn’t termination, and it feels pretty close to blackmail.

The thing is, I can’t actually remember using Ladbrokes to play poker, as it was so long ago. I dug up my details and logged on, to a) see if had any money in the account, and b) close it down, on the basis of this ridiculous email. My account balance is £0.00 (and based on the above terms I shouldn't have been notified of a charge, precisely because my account is at £0.00). I have written to Ladbrokes to ask it to terminate my account. Way to lose a customer...

The back story is that I joined on 24 March 2008. Ladbrokes allows you to search through your account history, but only as far back as 1 January 2010, for bewildering reasons. I haven’t used the account in that period, and I’d wager that I didn’t use it in 2009 (I’ve asked the question). Which begs the question as to why I’m suddenly being pushed for a £2.00 inactivity fee in March 2011. I'm wondering whether the fee was introduced in November 2010, when I received an email notifying me of changes to the T&Cs. Hmmm.

Ladbrokes isn’t alone in employing this low-rent fee as a wacky customer retrieval / removal tactic, but it’s certainly the first time I have had the misfortune of being on the receiving end of one. It's not about the money, you understand. It's about the shakedown. Credit cards and banks

So I guess by responding I’ve helped it to improve the health of its customer database, though for a measly £2.00Ladbrokes has left an indelible stain on its brand. I won’t be back.

I think we need a new metric for the opposite of customer retention; something along the lines of ‘ex-customer lifetime avoidance’.

Three incidental points:

  1. The site's security certificate is not trusted.
  2. Using a ‘noreply@’ email address suggests that you are doing customer services all wrong.
  3. Before you say “Ah, but clearly this tactic works based on your response” please note that I only responded to this in order to write about it. Ladbrokes would otherwise be whistling for its fee…

What do you think? Is it just me that thinks this sort of thing is totally counterproductive, borderline unethical and downright offensive?

Jason Kiwaluk

Mower & Shoveller,

Ideation | Ecommerce | Fintech | Innovation | Strategy | Opinionated Agitator RevenueWire,FuturePay+PayMotion

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