FTC Takes on Subscription Traps With 'Click To Cancel' Rule (reuters.com)
- Reference: 0175265741
- News link: https://news.slashdot.org/story/24/10/16/1550257/ftc-takes-on-subscription-traps-with-click-to-cancel-rule
- Source link: https://www.reuters.com/world/us/ftc-takes-subscription-traps-with-click-cancel-rule-2024-10-16/
> The "click to cancel" rule requires retailers, gyms and other businesses to get consumers' consent for subscriptions, auto-renewals and free trials that convert to paid memberships. The cancellation method must be "at least as easy to use" as the sign up process. FTC Chair Lina Khan said in an interview that the rule is an overdue response to a rising number of consumer complaints about situations in which it is "extraordinarily easy to sign up for a subscription, but absurdly difficult to cancel."
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> "Companies shouldn't be able to trick you into paying for subscriptions that you don't want," Khan said. The rule prohibits requiring consumers who signed up through an app or a website to go through a chat bot or agent to cancel. For in-person signups, companies must provide means to cancel by phone or online. "The pandemic brought to the surface just how businesses are making people jump through endless hoops," Khan said. Requiring in-person cancellations while the businesses themselves were closed "really highlighted the absurdity of these practices," she said.
[1] https://www.reuters.com/world/us/ftc-takes-subscription-traps-with-click-cancel-rule-2024-10-16/
Re:While I think this is a good thing (Score:5, Insightful)
American Express, Visa, MasterCard and Discover all offer an "updater" services to merchants that provides them with your new credit card numbers and expiration dates.
I'm not saying merchants always use this service. But your tactic is just going to be a cat and mouse game. This will escalate and us consumers are going to be on the losing side.
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If the bank provides a new cc number to replace a virtual card number that I have specifically cancelled, I'll have words with the bank. And they will not be nice words.
The entire point of being able to cancel the virtual cards quickly and easily is precisely this scenario, after all.
Re: While I think this is a good thing (Score:2)
So rather than dealing with one indifferent corporate bureaucracy, you're dealing with another trying to get your money back. OR, we can have regulations like this, which would reduce friction for consumer choices and, I think, benefit both consumers (who won't wonder if they've signed up for a PITA a few months the line) and subscription services (who won't have to convince customers that they won't make themselves a PITA).
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I did say that I approved of this idea. I guess you were too busy jerking off to notice that part.
I just pointed out there are already other means of handling this that have been around for a long time.
Re: While I think this is a good thing (Score:2)
Sorry, my load was covering the subject line
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The difference is the law already provides that the Bank will be liable for unauthorized charges above $50.
In reality if a virtual account is "closed" or "cancelled": the bank does not provide the merchant with access to your other accounts.
Mastercard's updater service only applies when the same account remains open, and you are issued a new card. It gives them the new details for the same account. They will Never provide the details for a new account that is Not the same account that merchant ha
Re:While I think this is a good thing (Score:4, Informative)
> The entire point of being able to cancel the virtual cards quickly and easily is precisely this scenario, after all.
Virtual cards are to mitigate the security risks of giving out your credit/debit card number to every damn merchant on the internet, and as a means of ensuring that when a service requires that you put a card on file in order to use a "free" service (like Roku used to do back in the day), you won't end up being charged.
They were never intended as a method of cancelling a subscription, since many companies will continue to bill you even after your card payment fails. Even if they do ultimately cancel your subscription after however many billing cycles it takes, you can still be sent to collections for an unpaid debt. There's no two ways about it, if you're done with a subscription you need to cancel it properly, so the FTC requiring that the process be as easy as signing up is absolutely a good thing.
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services to merchants that provides them with your new credit card numbers and expiration dates.
If somehow a merchant submits a charge that is Not the same card I provided them, then they will have a Chargeback for Unauthorized card use on their hands.
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If you cancel the card but not the subscription, the vendor could sue you for the unpaid balances. OP is a terrible idea and thankfully modded troll.
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This does not stop your obligation to pay.
Re: While I think this is a good thing (Score:2)
Tried that with SiriusXM. The account continued to accrue charges, even though there was no valid card to bill .
No you can't. (Score:2, Informative)
I did exactly that. Four months later, I had my credit record take a huge, 200+ point ding, and then had a debt collector demanding payment. Though it was just a $20/month thing I canceled, by the time fees were added, I owed $2000, and it took a shitload of fighting, more than just paying them to deal with that to clear my credit.
Read the fine print. They can and will sue you.
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Contract law doesn't give any company the right to just keep billing your credit card after you've told them to stop. I don't know how they get away with doing that.
Contract law 101: You can cancel any contract at any time for any reason. If the other party suffers damages, then you could be held liable for that. Like old cell phone contracts where you get a free phone - you're agreeing to X months of paid service in exchange for the phone. Quit and you owe for the phone.
What damages does a gym suffer
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> Contract law doesn't give any company the right to just keep billing your credit card after you've told them to stop.
That's the thing - you haven't told them to stop, you've told the bank to deactivate the card number. That causes a declined transaction on the merchant's end, which can happen for any number of reasons unrelated to a desire to cancel your service. From their perspective, perhaps the customer's card has expired, the customer exceeded their credit limit, or the card has been deactivated because it was lost/stolen/subject to a data breach elsewhere.
The merchant/service provider doesn't explicitly know you i
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"The market" as you put it does any evil shit that is not prohibited by law. And most services have chosen to be assholes and to make it as hard as possible to cancel.
Dark patterns. Hiding the cancellation option where people are least likely to see it. e.g. on a page it is not expected to be on, and on page where attention is drawn AWAY from the cancellation link.
Dark patterns. Not reminding you when your subscription is about to expire, or only doing so days before knowing some people will forget in the i
KHAAAAAAAAAAN (Score:2, Insightful)
This is fantastic news. I hope she can get more done before the Trump presidency ousts her. The FTC has been toothless and craven for too many decades before this.
Efficient markets (Score:5, Insightful)
This may actually help the subscription business model. I know I've refused things I would have signed up for because I knew they would be virtually uncancellable. Of course there's the additional market lubrication. And someone who wants a gym subscription or meal service is likely to go with one or another, this doesn't remove the actual demand.
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Exactly this, i always look at the unsubscribe process *before* signing up for anything. If the unsubscribe process is unnecessarily difficult then i won't sign up at all. If there's a simple "cancel" button in the web interface then i'm quite happy to give the service a try.
Re: Efficient markets (Score:2)
Companies sometimes change things on you afterwards. Such as reducing the day/hours for the agents you have to call to cancel. It may be 24/365 when you sign up, but could still change.
Birchbox got me with this before (Score:4, Informative)
They would only accept a cancellation via e-mail, then once you cancelled via e-mail they wouldn't let you for a full extra year, then when I disputed the charge on a credit card, they rebilled it again, then I even changed my credit card # to be rid of the them, they claimed to be a "utility" and abused the bank's automatic processing of utilities for updates of credit card number to bill again. We are talking about a make-up sample box claiming to be a utility. It was the most difficult process.
Subscription overload (Score:4)
I've avoided products and services because they are subscriptions. 9/10 you forget about them, they jack up the cost in an email that disappears in your spam folder, etc. They make subscribing very easy but leaving can be an Easter egg hunt. I keep a close eye on my CC reports though and I catch subscription bloat but I doubt most people track these things. I wonder if it should be a practice to claim your CC card was stolen and get a new number once a year to clear things out.
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Every month, I go through what bounced off my credit cards, and see what happened. If I can't easily cancel an account, I hire a lawyer to do a C&D on the firm. Usually because they got served legal paperwork, they cancel the account and blacklist me forever because of the company standard in most companies to kick out as far as possibly anyone lawyering up. This is a last resort, but it is a lot cheaper than blocking some subscription, then finding they have destroyed your credit, perhaps doing "sew
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I canceled a card from my mother, and she had already gotten several calls from the credit card company's fraud division because many purchases looked like scams (they were). I talked to them on the phone for a bit, we got everything canceled, all charges disputed, it's all cleaned up. But... every few weeks she gets email from the credit card company with special offers, all appearing as if some division hasn't realized she no longer has a card.
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Correct.
The best solution is to avoid subscription services automatically paid via credit card and bank accounts wherever possible.
The world is becoming enshitified with all of these subscription services.
Take the time to do "whatever the product or service requiring a subscription" yourself.
Now, some subscriptions are unavoidable such as utility bills, insurance, child day care, etc. But those industries are already regulated.
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Yup, cleaning up some of my mothers finances, I'd run across stuff that was a subscription that she complained about. "Why are they sending me this?" Trying to cancel was very difficult - they didn't have an easy to use web page, and there was no phone number to call, so I just returned the package unopened at the post office, the credit card had already been canceled. These companies were already skirting the law by selling "supplements" with undisclosed "patented formulations", and they wanted to send
Longstanding problem. (Score:2)
A decade ago I had to fight it out with both Frontier and Dish to cancel the landline and the satellite TV respectively. I had to cancel a credit card to break auto renewal to Scientific American. I currently have a Chase credit card that seems to be uncancellable unless I dedicate considerable time to waiting on hold. So I reported the card stolen and then never activated the replacement. After two years they still haven't cancelled the card or even enquired about it.
So there is still more work to be done,
And also... (Score:2)
... an affirmative consent to autorenew. i.e. if I receive a 30 free trial, or sign up for 3 months to some service, they have to ask me to affirm whether I want to autorenew or not when the subscription expires. i.e. I, the user must click yes or no. And I should not be penalized for selecting the no option. i.e. there must be no incentive of any kind for choosing to say yes.
the free market solves everything! (Score:2)
we can't let government interfere with these companies' freedums! the free market wants it to be hard to unsubscribe so that's how it should be :D
legally binding? (Score:2)
Didn't a federal judge just say recently that agencies couldn't pass stuff like this, and congress had to do it?
Next up: Court challenge (Score:1)
The supreme court struck down the "Chevron Deference" for Federal Agencies. This took away an important tool for agencies to regulate things such as this. It basically means that if there is any ambiguity in the agencies charter on what they're allows to regulate, a new regulation can be challenged in court. The only way this would fail is if Congress updates the agencies charter to cover it. So t's have to be crossed and i's have to be dotted for a regulation to hold up.
Since the US congress and the Senate
Who remembers the AOL cancellation nightmare (Score:1)
AOL ("You've got mail!") was all the rage like 25yrs ago. I think they sent a CD (or multiple) to just about every household in the US to sign up. They made it easy peasy to install, pay and use. But holy crap they made it impossibly frustrating (deliberately so) to cancel. My own experience were multiple calls to cancel the service. Each time they would keep you on the phone while they tell you why you should not. It was a ploy to get you completely frustrated and either just hang up or mad enough to get
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Yeah, just don't agree. Then I can do without a dentist, bank, cell phone, email account, or car. Easy peasy!
Re: (Score:3, Insightful)
These terms are predatory and hidden in legal jargon of the contract. You can't put just anything you want in there. The only people, people like you, that don't want this bullshit fixed are the con artists that benefit from the fraud. That is about to change
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They know damn well what they are doing by burying the average person in a pile of legal "the party of the first part" jargon legalese crap. They know people won't read it and can't understand it or understand the implications of the terms. It is why the gov forces some industries to put consumer text in simplified terms.
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Undo mod.
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They should either revise their 'contracts' to make then understandable for a person without a legal degree, or pay for both an attorney and a professor of Latin for each customer so that the agreement can be interpreted in an unambiguous way.