The first fraud I noticed with Netflix is that they if they attempt to charge your credit card and it is declined they freeze your account so that you cannot use the service, but when the payment is finally authorized, they charge you as if you were receiving the service the whole time, e.g. I get charged around the 9th of the month for about $10 for a month of service. If my card is declined, they freeze my account and keep trying the card. If the money is in my account, say, on the 23rd, they charge the $10, resume service, and charge me $10 again on the 9th of the following month. They charged me for 2 weeks I wasn't allowed to use their service.
So, in order to avoid this stupidity (and the resulting overdraft charges) I bought a 3-month gift card last month for myself at Best Buy. The card had printed on it "Must have a valid credit card on file on your account in order to use this card." "Great, I thought...I have a balance in my account now so it's valid, I'll add this and they won't attempt to charge me for three months." I added the card to my account and went worry-free for a month.
I just got an email today that my account is on hold because my credit card was declined. I called Netflix to inquire and inform them that I have a 3-month gift card on file. They said, "Yes, but your credit card is not valid at the moment, so your account is frozen." I told them how ridiculous that is...I bought the card to avoid this situation. They said they still need to authorize the credit card every month regardless of whether or not you've paid in advance.
I asked, feeling kind of stupid thinking that this must be a given, if my gift card balance will be frozen since I'm not using the service I paid for. The rep said no...the balance on the gift card is still running out. She pointed out to me that I have a DVD out (I use Netflix almost exclusively for streaming movies to my TV), so I AM, in fact, using the service. I said, "fair enough...so I'll get that right back to you. Then you'll freeze my gift card, correct?" She replied, "No. You gift card balance will still be running out." I said, "Let me get this straight...even if I am NOT using your service, you're still charging me for it?" She said, "No. We're not charging you anything. Your account has been prepaid and we will not charge you again until your gift card runs out."
I pushed the point and while she admitted that my prepaid gift card is running out whether or not I'm allowed to use the service, but I could not get her to admit to charging me for a service I am not using
If you live paycheck to paycheck (or are unemployed, which I was for a year and a half and until very recently) DON'T subscribe to Netflix. Also, DON'T buy a gift card thinking it's your get-out-of-jail free card. That just gives them new and more imaginative ways to rip you off.
I originally thought Netflix was a stand-up company and with a mostly digital product these days with a low overhead that they would have no reason to abuse its customers. I'm very sad and disappointed that Netflix has chosen to conduct their business the way they have.
I am filing a formal complaint with the attorney general of Colorado, the better business bureau, and considering legal action on behalf of myself or a class action lawsuit if others are experiencing the same abuse by this company.