- Consumers and advocates are fed up with how incredibly difficult it is to unsubscribe.
- Democratic Rep. Mark Takano plans to revisit the issue at this convention.
- The Biden administration has also held some companies accountable.
It’s the new streaming show you can’t miss. The one-time gift you probably forgot. The New Year’s resolution, which started strong, but in February you have doubts. Whatever it was, it’s now a subscription.
Today you can’t evade subscriptions. They include everything from our binge watching to our packed lunches to books and makeup.
If you want to quit, it will be difficult. The struggle frustrates even the professionals who deal with it. Do you need to show up somewhere in person? Clicking through a maze of prompts? Call a hotline? That is, if you can even find the number capable of reaching a “National Treasure” level of detective skill.
According to Pymnts.com, a website that tracks e-commerce, a little over 80% of American households had a subscription by the end of last year. And while the retail industry is seeing a drop in subscription numbers, rest assured that going free has been a concern for consumers.
Proponents are urging Congress to act
Congress has tried twice to make it easier for Americans to opt out. Rep. Mark Takano, a California Democrat, told Insider that he plans to reinstate The Unsubscribe Act for a fourth time later this year. Consumer Action and the National Consumers League have helped drive legislation in the past.
“Fraudulent practices by large companies make it easy to sign up for subscriptions but almost impossible to unsubscribe,” Takano said in a statement to Insider.
The bill would require companies to be upfront when converting a free trial to a paid plan without specifically telling you, a practice known as negative option billing. The legislation would also require a company to offer a hassle-free termination process. That would mean that if a company lets you subscribe via an app, then they can’t require you to come in person to unsubscribe.
Senator Brian Schatz, a Democrat from Hawaii, has worked on accompanying legislation in the past. His bill had the distinction of garnering bipartisan support, including Senator John Thune, the No. 2 Republican in the Senate.
Passing a bill in a divided government will be daunting, but the prospect of bipartisan support could offer a glimmer of hope.
Hard-to-cancel subscriptions are a common business model in many industries
Consumer advocates who Insider spoke to said their own struggles brought the issue to their attention.
Ruth Susswein, director of Consumer Action, was stunned to discover that what she thought was a one-time gift had actually become a recurring fee, thanks to an automatic renewal clause hidden in the terms of service.
“This is more than just an inconvenience, nobody should do business like this,” Susswein said. She added that businesses need to find it cost-effective to automatically register consumers without worrying about those who might object or potential legal issues with regulators or attorneys general.
John Breyault, a National Consumers League official who focuses on telecoms and fraud, said his organization became aware of the issue after they realized their office furniture lease had an automatic renewal.
“We weren’t aware of the automatic contract renewal,” Breyault told Insider. “We had to fight like hell to get out of there.”
“When it happens to us, it happens to consumers, nonprofits and businesses all the time,” he said.
Search any social media thread for subscription issues and you’ll see some common culprits.
Adobe is so notorious for using cancellation fees that users have come up with workarounds. A company representative did not respond to a request for comment.
Many complaints relate to publications, a 2021 survey by the American Press Institute found that only 41% of US publications made it “easy” for readers to cancel their subscriptions online. Formerly the New York Times direct subscribers either to a virtual chat or a hotline. Just last year, the Times began allowing digital subscribers to cancel their subscriptions directly, Times spokesman Charlie Stadtlander told Insider. He added that the publication hopes to make this available to all print subscribers soon – currently only a few can use this method.
Planet Fitness advises that its members must cancel at a gym or by mail, even though they can sign up online.
“Our standard cancellation policy, which is presented to members upon enrollment, indicates that cancellation is required in person or by written email notification,” said McCall Gosselin, senior vice president of communications and corporate social responsibility at Planet Fitness , in a statement to Insider.
Gosselin added that they’ve added digital cancellation capability in some states and are looking at ways to expand access to the feature.
Biden could do something about it
The Federal Trade Commission could also use its policies to prosecute companies. It has in the past.
The FTC fined Vonage, an online phone service, $100 million after the agency claimed the company used “dark patterns” that made it difficult for customers to cancel. In some cases, the agency claimed the company continued to charge customers even after they located the cancellation hotline number and spoke to an actual person. In October 2021, the FTC issued an enforcement policy statement clarifying that it will notify companies when they make subscribing easy and unsubscribing far too difficult.
But the problem is so big, Breyault warned, the agency can’t tackle it alone. He added that the FTC has so many different responsibilities, including crypto, that they only look for the most egregious defenders. Passing the Unsubscribe Act would give the federal government additional legal powers to hold companies accountable beyond the FTC’s overall powers.
There is precedent for executive action working on it, but mostly abroad.
Amazon agreed to change the way users cancel their Prime memberships after action from European regulators, US consumer groups and eventually the FTC. Before the tech giant changed its practices last summer, Public Citizen, another US consumer group, posted a video shows the long process it took to cancel the service. It was an odd juxtaposition for a company that makes one-click purchasing a big part of its model.
— Public Citizen (@Public_Citizen) January 14, 2021
State and local officials have also taken note.
Then-DC attorney Karl Racine prosecuted grocery delivery service Grubhub for hitting customers with hidden fees and using deceptive marketing through its subscription service. The company later agreed to pay an $800,000 fine and an additional $2.7 million to settle the lawsuit.
Still, the chances of a law passing this Congress are very slim. President Joe Biden addressed consumer-related issues in his State of the Union, but it’s unclear where unwanted subscriptions fit.
As consumers wait for regulation, the situation is so grim that some companies are now focusing on helping you get out of the pile of unwanted subscriptions.
Of course, you often have to register for this as well.