FTC Takes on Subscription Traps With 'Click To Cancel' Rule (reuters.com) 33
The U.S. Federal Trade Commission adopted a final rule on Wednesday requiring businesses to make it as easy to cancel subscriptions and memberships as it is to sign up, in the agency's last major rulemaking before the Nov. 5 election. From a report: 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."
"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.
"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.
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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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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)
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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.
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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
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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 s
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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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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:1)
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
KHAAAAAAAAAAN (Score:2, Insightful)
Efficient markets (Score:5, Insightful)
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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)
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
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)