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Remote device management firm LogMeIn has come under fire from IT support and managed service providers, who claim its subscription renewal system has hit them with hundreds of pounds of “unexpected” credit card charges.
The company is accused of automatically renewing customers’ subscriptions without telling them that the annual cost of using its cloud-based services has gone up.
Disgruntled subscribers claim, in hundreds of threads within the LogMeIn support forums, that the company’s auto-renewal tactics have landed them with unbudgeted-for credit card charges, in some cases totalling hundreds of pounds.
Numerous complaints also accuse LogMeIn of taking payment from customers even though the card originally registered to their LogMeIn account had expired.
A handful of customers, speaking to Computer Weekly on condition of anonymity, claimed they had received no advance warning about LogMeIn’s plans to raise its prices ahead of their renewal dates.
One former customer said his annual LogMeIn Pro Basic subscription rose from £160 to £449 a year, and that the price hike came to light only after payment was taken.
“They claim they let me know by email 30 days before it was due for renewal, and that would tell me why the price has increased, but I never received an email,” he said. “I never delete any emails and religiously check my junk folders – and I never, ever received one.”
The customer contacted LogMeIn to cancel his contract and request a refund. Both requests were initially refused, until the company relented in March 2016.
“If the subscription price remained the same from one year to the next, very few people would be kicking up such a fuss over the auto-renew issue, and it must have backfired massively for them judging by the reaction of members and customers on the forum,” the customer added.
LogMeIn supplies cloud-based IT management tools that are used by tech support firms to remotely manage the IT estates of their end customers. The company has been publicly listed since 2009.
LogMeIn community forum feedback
AvertoIT: “We’ve gone from £117 to £499 and now don’t yet know the renewal price for this year, but we’re looking at a min of £999. So we have had an increase of over 800% in two years.”
UKITSolutions: “You’ve gradually increased prices to an unacceptable level, so I am out and taking my client base with me.”
Mayur: “We used to pay $239, then $299, then $799 and now we are supposed to pay $14,999? Are they INSANE? We plan on going elsewhere, even if means having a few less features.”
Disasteraverted: “Personally, I’m OK with auto-renew, but if you don’t email me a couple of weeks prior with a notice and an invoice, I’m going to be steaming mad.”
PMaddox: “I just saw an ‘automatic renewal’ charge on my credit card. I have five computers and I was charged $349. In 2014, it was $129. When they charged $249 in 2015, I didn’t realise it, but that was an increase of 93%.”
Markn1: “The credit card connected to our LogMeIn account expired on 2/2016, so I guessed they would stop the service, but I just found out they somehow guessed my new expiration date and proceeded in charging the new credit card, [even though] I never gave them my details.”
Its flagship offerings include LogMeIn Pro, a remote access tool, and LogMeIn Central, a device management service. Three versions of each product are available, the price of which varies depending on the number of users they cater for and the range of features included.
The products are sold on a subscription basis, and customers pay an annual one-off fee for the year ahead. The contract automatically rolls over for another 12 months unless the customer writes to LogMeIn at least 30 days before their renewal date, to cancel.
After bringing the customer complaints to LogMeIn’s attention, Computer Weekly was told by a spokesperson that customers are made fully aware of any “year-over-year” changes to its products’ pricing and feature-set ahead of renewal.
“We notify the customer 30-days prior to their renewal, both via email and also within the product itself [splash screens or other interruption-type notifications],” the spokesperson said.
“We take this intentionally redundant action to ensure transparency. In addition, current and future billing details – purchase and renewal dates, product package, billing rates, billing history, and so on – are made available to customers via the account settings menu within the product and on LogMeIn.com.”
While many customers claim not to have been notified ahead of time about the price hikes, Computer Weekly has received documents from several customers that suggest pre-renewal emails are being sent out in some cases.
After reviewing LogMeIn’s terms and conditions, IT lawyer Dai Davis told Computer Weekly that the company is actually under no contractual obligation to warn users in advance of possible price hikes.
“There is nothing at all in the LogMeIn contract about having to give users notice about any increase in subscription price,” he said. “In that regard, it’s a normal, one-sided cloud computing contract with no regard for the customers’ interests whatsoever.”
Charges to expired credit cards
Some customers have attempted to side-step LogMeIn’s auto-renewal procedures by not updating their payment details when the credit card linked to their account expires, only to find their new card has been charged anyway.
The company’s terms and conditions do state that it will, from “time to time”, take steps to check the authenticity of customers’ credit card details using auto-update software to ensure the payment information they have is up to date and accurate.
This practice has been called into question by forum users and customers that Computer Weekly has spoken to directly, but a LogMeIn spokesperson denied any wrongdoing.
To emphasise this point, the spokesperson claimed that other cloud and hosting firms, such as Intuit and GoDaddy, use similar software and tactics.
“This provides continuity of service without the need for either side to take action to ensure a customer’s access to their remote devices,” the spokesperson added.
A history of price hikes
Complaints about LogMeIn’s product pricing strategy, and how much warning it gives customers ahead of changing it, are nothing new.
The company announced plans to start charging people for using the free version of its remote management tool in January 2014, giving them just seven days to migrate over to the subscription-based LogMeIn Pro. Before this change, the service had been free to use for the previous 10 years.
Twelve months later, the company introduced three versions of LogMeIn Central – dubbed Basic, Plus and Premier – that incorporated LogMeIn Pro and upped its pricing accordingly.
Data shown to Computer Weekly by LogMeIn customers suggests the price of LogMeIn Central Basic rose by from $229 a year for 100 devices to about $899 for the same number of seats.
New Zealand-based IT support provider David Bursell ditched LogMeIn after 10 years in January 2016, despite managing to avoid the worst of the price hikes by negotiating discounts ahead of his renewal date.
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Having previously paid $229 a year for 100 devices, he claims his negotiations helped him avoid subsequent price rises to $699 and then $899 in later years.
“To have 180 connections with Central Basic, I’d be paying $1,299 today, after yet another eye-watering price increase,” he said.
Bursell’s negotiations may have helped him avoid a 200% price rise, but LogMeIn’s product and pricing revamp has seen others face even steeper hikes.
One forum member said their company jumped ship to LogMeIn competitor TeamViewer after allegedly discovering that the cost of supporting its 700 devices with LogMeIn Central was set to rise from $299 to $14,999 a year.
“We are just going to switch to TeamViewer for remote access and write our own program to push scripts,” the forum user said. “We can develop our own software for way less than $15,000 a year.”
Bursell claims posts like this prompted him to cancel his LogMeIn contract. “What LogMeIn has cleverly done is make these drastic changes with virtually no warning, so users have been unable to move to another product with enough time to do so before the renewal happens,” he said.
Remote support provider Splashtop has emerged as a common destination for disenchanted LogMeIn users, according to a number of posts in the LogMeIn forums.
Splashtop CEO Mark Lee suggested to Computer Weekly that LogMeIn’s price hikes could be part of a conscious push to court larger enterprises and move away from its historical freemium and SME-heavy user base.
“The churn rates on bigger customers is weaker than the freemium people, who saw the price increase and thought it was time to move on,” he said.
“If customers have a lot of computers, they might feel it would be a cumbersome process to change over every computer they manage to a new agent, so they stay.”
LogMeIn posted its full-year results for 2015 in February 2016, 13 months after the LogMeIn Central product and pricing revamp.
The firm’s revenue was up 22% on the previous year to hit $271.6m, and the gross renewal rate across all its product lines, which is not limited to LogMeIn Pro or Central, was 80%.
This 80% renewal rate figure has remained consistent for several years, but the publication of its first-quarter results in April 2016 show the renewal rate has now dropped to 75%.
When Computer Weekly raised this with LogMeIn, the spokesperson said the drop reflects the company’s wider change in “innovation and investment” focus over the past few years.
“We understand this direction may not align with that of more casual remote access users,” the spokesperson said. “As a company, we are focused on what we see as three of tech’s most important markets: identity and access management, collaboration, and customer engagement.
“On the remote access and management side [LogMeIn Pro, Central], our investments in innovation are focused on professional use cases.
“So it is not surprising to see some year-over-year change in this customer base – a base that, on the IT side, will skew towards heavier users with more sophisticated needs.”