The FTC wants to ban hard-to-cancel subscriptions such as for Gym and Cable

[nonme]

Summary

 

The US Federal Trade Commission (FTC) introduces the "click to cancel" rule which will allow them ban hard-to-cancel subscriptions such as for gym and cable, with up to fine up to 50,000 per violation.

 

Quotes
From The Verge article:

The US Federal Trade Commission is proposing a formal ban on subscriptions that are simple to start but difficult to stop. This morning, it announced a notice of proposed rulemaking it dubs “click to cancel,” requiring companies to make ending a subscription equivalently simple to signing up for one. That includes letting people use the same method for both actions — so a business can’t, for instance, let someone sign up for a service online but make them call a phone number to cancel.

 

Quote

“Companies should not be able to manipulate consumers into paying for subscriptions that they don’t want,” FTC chair Lina Khan told reporters in advance of the announcement. “We get countless complaints about this.”

 

The agency can recover around $50,000 per individual violation of a consumer’s rights, and consumer lawsuits can recover damages for lost funds and potentially wasted time.

 

My thoughts

I'm sure we've all dealt with a difficult-to-cancel subscription at some point. One that immediately comes to mind is a gym membership that I signed up for. I only signed up for a 10 day trial, and they make you jump through all types of hoops just to get them to cancel it. It's also one of the reasons I'll never sign up for The New York Times.

 

Sources

https://www.theverge.com/2023/3/23/23652373/ftc-click-to-cancel-subscription-service-dark-patterns-ban

https://www.ftc.gov/news-events/news/press-releases/2023/03/federal-trade-commission-proposes-rule-provision-making-it-easier-consumers-click-cancel-recurring

https://gizmodo.com/ftc-cancel-subscription-click-to-cancel-membership-1850256040

https://www.npr.org/2023/03/23/1165527249/ftc-rule-charges-cancel-online-subscriptions
https://www.foxbusiness.com/lifestyle/ftc-considering-click-cancel-rule-bid-ease-pain-ending-subscriptions

https://www.nbcnews.com/tech/tech-news/click-cancel-ftc-proposes-rule-help-consumers-ditch-subscriptions-rcna76297

[Hairless Monkey Boy]

An example of regulation designed to enhance the operation of the free market. *Chef's Kiss*

 

3 minutes ago, nonme said:

they make you jump through all types of hoops

 

At least jumping through all those hoops probably gave you a decent workout.

[WereCat]

And Amazon Prime as well I hope. (I know how to cancel it but 1st time was a journey).

[YoungBlade]

This is the sort of thing that I want more of from the federal government here (I'm in the US)

 

It's something that no one disagrees with outside of the corporations that benefit from this predatory behavior. There are so many divisive issues that see no progress due to political back and forth, and yes, those need to be solved, and yes, we can't just forget about them and move on like they aren't problems, but we can start by working together to solve issues like this in the meantime.

[SorryBella]

18 minutes ago, nonme said:

proposing

Lobbying in 3... 2... 1...

[OhioYJ]

21 minutes ago, nonme said:

consumer lawsuits can recover damages for lost funds and potentially wasted time.

Really we'll be able to sue someone again? At this point pretty much every company / service has a binding arbitration clause baked into their terms of service or fine print somewhere... 

[dizmo]

17 minutes ago, WereCat said:

And Amazon Prime as well I hope. (I know how to cancel it but 1st time was a journey).

My girlfriend thought she'd cancelled her subscription to both Amazon's just before Christmas. Turns out she's been paying ever since, because on a phone it's really not obvious that you have to scroll allll the way to the bottom of the page that loads, after you've already hit cancel, to hit yes I really want to cancel...3 more times. It's ridiculous, and while I have nothing against Amazon as a whole, that practice is simply wrong. 

[Kisai]

30 minutes ago, nonme said:

Summary

 

The US Federal Trade Commission (FTC) introduces the "click to cancel" rule which will allow them ban hard-to-cancel subscriptions such as for gym and cable, with up to fine up to 50,000 per violation.

 

Quotes
From The Verge article:

The US Federal Trade Commission is proposing a formal ban on subscriptions that are simple to start but difficult to stop. This morning, it announced a notice of proposed rulemaking it dubs “click to cancel,” requiring companies to make ending a subscription equivalently simple to signing up for one. That includes letting people use the same method for both actions — so a business can’t, for instance, let someone sign up for a service online but make them call a phone number to cancel.

 

There goes Transunion's entire business model.

[Ankh Tech]

35 minutes ago, Kisai said:

There goes Transunion's entire business model.

There goes a lot of companies' entire business model

[8tg]

I used to get calls from State Farm reps non stop and would ask, please take me off your call list, I already have car insurance.

”well what about our other-“

I only need car insurance and I already have it

”to be taken off the caller list you have to go to [website] and fill out a form and-“

take me off your caller list or I will burn down 2420 Laporte Ave in Valparaiso Indiana

 

And then they stopped calling me for some reason.

to have a button accomplish the same goal would be nice, whatever stupid shit resulted in my phone number being given to State Farm should be immediately reversible 

[AndreiArgeanu]

Does this count for adobe as well?

[Hairless Monkey Boy]

1 hour ago, dizmo said:

you have to scroll allll the way to the bottom of the page that loads, after you've already hit cancel, to hit yes I really want to cancel...3 more times.

It's almost as if it were designed to be intentionally malignant 

[Brooksie359]

4 hours ago, OhioYJ said:

Really we'll be able to sue someone again? At this point pretty much every company / service has a binding arbitration clause baked into their terms of service or fine print somewhere... 

Terms of service and fine print does not protect against anti consumer practices especially if those are illegal. If a company really believes that saying they have something in their terms of service to allow them to not allow people to cancel their subscription easily they have another thing coming. I feel like people think terms of service is more legally binding than it actually is. If the terms of service is reasonable then it can often times be binding but as soon as it has unreasonable things in there it becomes more and more likely that it will be not enforceable. 

[OhioYJ]

3 hours ago, Brooksie359 said:

Terms of service and fine print does not protect against anti consumer practices especially if those are illegal. If a company really believes that saying they have something in their terms of service to allow them to not allow people to cancel their subscription easily they have another thing coming. I feel like people think terms of service is more legally binding than it actually is. If the terms of service is reasonable then it can often times be binding but as soon as it has unreasonable things in there it becomes more and more likely that it will be not enforceable. 

Don't get me wrong, I agree with you, it was more a comment on how common place those binding arbitration clauses have become. They are in practically everything at this point.

 

This isn't the best example (in my opinion, as Nintendo was repairing these), but a recent one:

 

Nintendo Joycon Drift Case Tossed (Because of a binding arbitration clause)

 

As the article points out, in many cases, kids would have been the ones "accepting" the agreement? Does that make it unreasonable? It still ended up binding in this case.

[Brooksie359]

1 hour ago, OhioYJ said:

Don't get me wrong, I agree with you, it was more a comment on how common place those binding arbitration clauses have become. They are in practically everything at this point.

 

This isn't the best example (in my opinion, as Nintendo was repairing these), but a recent one:

 

Nintendo Joycon Drift Case Tossed (Because of a binding arbitration clause)

 

As the article points out, in many cases, kids would have been the ones "accepting" the agreement? Does that make it unreasonable? It still ended up binding in this case.

I wonder how much Nintendo paid that judge lol. From what I understand putting non arbitration agreements in EULA or terms of service hasn't held up on court before against class action lawsuits so it's weird it would in this case. I guess it's probably because the severity of the issue is just a slightly defective product rather than a safety issue. Granted I believe non arbitration agreements that are signed knowingly can even be void if one party does something actually illegal to the other party. 

[williamcll]

Imagine if you can chargeback these kind of subscriptions 

[mr moose]

Being able to revoke direct debt authority is the best thing for these types of crooks.  I had to do that just recently with a pool membership. 

[wanderingfool2]

13 hours ago, Brooksie359 said:

I wonder how much Nintendo paid that judge lol. From what I understand putting non arbitration agreements in EULA or terms of service hasn't held up on court before against class action lawsuits so it's weird it would in this case. I guess it's probably because the severity of the issue is just a slightly defective product rather than a safety issue. Granted I believe non arbitration agreements that are signed knowingly can even be void if one party does something actually illegal to the other party. 

They didn't really have to pay the Judge, I think it was the correct outcome.  They sued on behalf of the kids, but the true owner of the product were the parents (who already went through the arbitration).  So at that point they would have to file an appeal saying the arbitrator erred in their decision making process...which might work since the EULA was determined by the arbitrator to be signed by the kids, which from my understanding now makes it a contradictory ruling of ownership/responsibility.

 

But yea, you can't really write your way out of illegal actions with an EULA...although they could pretty much make a waiver where you sign away responsibility (but the way a law like this is worded I doubt they would be able to). 

 

Overall, I think it's a good thing if they can't make it an undue restriction but I could see this getting tricky very quickly if the law isn't worded correctly.

[OhYou_]

never understood this. 

if you cant cancel a subscription, it's an easy fix. 

like just call your bank and say you lost your card. they will send you a new one and now your subscription is canceled. 

they may send you some collections letter or something, but just bin it who cares.

[Middcore]

8 minutes ago, OhYou_ said:

never understood this. 

if you cant cancel a subscription, it's an easy fix. 

like just call your bank and say you lost your card. they will send you a new one and now your subscription is canceled. 

they may send you some collections letter or something, but just bin it who cares.

 

Then you have to change all of the subscriptions/recurring payments on that card that you still need to keep. Your "solution" to having trouble cancelling one subscription is to do the work of cancelling 5-10-20.

 

There is no legitimate reason anybody should have to do such a ridiculous thing, or do any more work to cancel a subscription than to click twice: once on a button that says "cancel my subscription" and once one a button that says "Yes I'm sure." 

[wanderingfool2]

23 minutes ago, OhYou_ said:

never understood this. 

if you cant cancel a subscription, it's an easy fix. 

like just call your bank and say you lost your card. they will send you a new one and now your subscription is canceled. 

they may send you some collections letter or something, but just bin it who cares.

They can send you to a collections agencies, ruin your credit score.  If you own a house, and they decide they want to set an example they could go to court and then put a lien against your house.

 

If in the subscription they have terminology for improper payments and have the wording so they can collect administration fees associated with non-payment collections they could effectively bill you for the effort they made in pursuing you as well (so that $30 subscription might have a few hundred dollars in subscription fees)

[Uttamattamakin]

I wonder how they can enforce this.  What is "easy"?  Perhaps making it so that starting the account to pay for it and canceling take the same steps and are done by the same method.  So like if you can sign up online you can cancel online too.  

No more of that sign up online with one  click ... but to cancel takes calling on the phone and waiting on hold for a call center on the other side of the planet to respond. (Then you only get the number to that call center after talking to a chat bot or answering a survey that tries to upsell you or offer you a different payment option for half an hour. )

[NF-A12x25]

On 3/23/2023 at 12:21 PM, 8tg said:

take me off your caller list or I will burn down 2420 Laporte Ave in Valparaiso Indiana

based gigachad

[Brooksie359]

3 hours ago, wanderingfool2 said:

They didn't really have to pay the Judge, I think it was the correct outcome.  They sued on behalf of the kids, but the true owner of the product were the parents (who already went through the arbitration).  So at that point they would have to file an appeal saying the arbitrator erred in their decision making process...which might work since the EULA was determined by the arbitrator to be signed by the kids, which from my understanding now makes it a contradictory ruling of ownership/responsibility.

 

But yea, you can't really write your way out of illegal actions with an EULA...although they could pretty much make a waiver where you sign away responsibility (but the way a law like this is worded I doubt they would be able to). 

 

Overall, I think it's a good thing if they can't make it an undue restriction but I could see this getting tricky very quickly if the law isn't worded correctly.

User agreements shouldn't allow non arbitration clauses tbh. It's overly restrictive and people shouldn't be expecting a user agreement to contain a non arbitration clause especially if thr clause isn't very visible in the user agreement. I mean basically any company could put a clause in user agreements to wipe their hands of responsibilities. I mean imagine if nobody could sue against Microsoft for the Xbox 360 red rings issue because they had to agree to a user agreement when starting the Xbox with a non arbitration clause. Or if nvidia did the same when you get drivers so people couldn't sue for the gtx 970 false advertising issue. Granted I think with false advertising a non arbitration clause in a EULA wouldn't save them as false advertising is illegal regardless. 

[wanderingfool2]

2 hours ago, Brooksie359 said:

User agreements shouldn't allow non arbitration clauses tbh. It's overly restrictive and people shouldn't be expecting a user agreement to contain a non arbitration clause especially if thr clause isn't very visible in the user agreement. I mean basically any company could put a clause in user agreements to wipe their hands of responsibilities. I mean imagine if nobody could sue against Microsoft for the Xbox 360 red rings issue because they had to agree to a user agreement when starting the Xbox with a non arbitration clause. Or if nvidia did the same when you get drivers so people couldn't sue for the gtx 970 false advertising issue. Granted I think with false advertising a non arbitration clause in a EULA wouldn't save them as false advertising is illegal regardless. 

I would say yes or not.  I'm assuming you are meaning containing an arbitration clause or no class action clause.  I think overall some of these things get super tricky in that if you don't have language like that in there you could face multiple class actions (which cost millions to defend) over items that should not really be fought over in court.

 

As an example, a 9 year old suing Nintendo because a MLB game didn't have the players names or correct roster in it (they got it through court and then had to also fight it on appeals)...it's really a double edged sword in some aspect having vs not having it.  The arbitration clause as well doesn't nullify existing laws as well...for example in the RROD for xbox if it went to arbitration it likely would still win and in that case MS might be forced to effectively pay out to anyone (since they know if they let it go to arbitration they will lose and in that sense arbitrating everything costs more money).  A few employers actually got into that situation before, where the employers began to waive the arbitration clause because so many people were using it that it was costing them too much money.