The FTC wants to ban tough-to-cancel subscriptions

elashri | 919 points

These things are insane. I tried to cancel a month-to-month gym membership from a small local gym, and they told me "cancellations become effective on the 1st of the following month" and "require two months advance notice" thereby effectively charging me for three additional months after I gave notice. Apparently, this was all in the agreement I signed, although it was written so unclear, that nobody would even suspect this is how they interpret it.

I told them if you don't cancel it effective right now I am posting this dishonest predatory practice on every social media and review site in town, as well as telling all of my friends I met in here what you are doing, and asking them to please quit in protest. I'll also be doing a credit card chargeback, and a small claims court case to recover the time it takes me to deal with all of this. I will also take action to recover my back membership fees, because they repeatedly failed to maintain equipment in a usable condition, so I didn't get what I paid for. They did concede, and canceled it immediately.

UniverseHacker | a year ago

In my third world country (Brazil) we actually have strict regulations on cancellations (among other consumer focused laws):

- Companies need to choose at least one channel to work 24 hours a day seven days a week. - The consumer can only be transferred from an attendant once. - If the call drops, the attendant must return the call and complete the service, without the customer having to repeat everything again. - Phone calls with human service must be available for at least eight hours a day.

I'm a particular fan of the "mirror" concept, where cancelations/returna should work in the same channels and be as easy as the purchases/subscriptions.

Consumer laws here are surprisingly good in my opinion and I am also surprised on how little lobby power consumers have in developed countries, to be treated like they are, with all the black hat tactics companies throw at them.

dakial1 | a year ago

Tangential to this - no small part of the reason why I like subscriptions in the iPhone App Store is because Apple doesn't let billers fuck around like this. There's one place to see everything, and you can cancel anything in a couple clicks. It's part of why I'd probably never use an alternative app store.

meepmorp | a year ago

One of the most nefarious instances of this I have seen is a "online mental health counseling" startup that was charging a non-trivial monthly recurring fee, even though it did not have any available appointments with a professional in the coming month. I had to call and haggle for half an hour on behalf of someone who signed up for the app, and only after putting in their credit card information was shown that there are no appointments.

Shame on the "startup", and absolutely disgusting that we as a civilized country allow scams targeted towards a vulnerable population to happen quite legally.

polygamous_bat | a year ago

Can they loop in New York Times subscription? You have to _call_ them during business hours to cancel. When I was subscribed, I prompted myself to cancel when we had to change CC numbers (random fraud), so I finally called NYT to cancel. "You have to pay out first" -- no problem, I'll pay last bill right now and cancel. "Once you pay out, you have to wait two days before you can cancel it". WTF? Outright shady.

cloverich | a year ago

I literally canceled my gym membership by cancelling my credit card. It was easier to update a handful of services on autopay than go through their daedric rituals of submitting cancellations by fax 90 days in advance.

Years later my wife and I signed up for the same gym. She was later able to cancel by talking to someone in charge and crying about it.

donatj | a year ago

I still have a membership to Planet Fitness from 5 years ago that charges to my account every month

while I had no problem signing up online, you can only cancel your membership in person at your "home" location, or by sending them a certified mail letter formally request cancellation (which I have tried and failed apparently because I never heard back)

I now live on the other side of the country, so it feels ridiculous to spend money on a flight ticket just to cancel a gym membership

worse, Planet Fitness requires you provide bank account/routing number for payment, so there is no way to cancel payment unless I switch bank accounts

52358 | a year ago

Nothing is tough to cancel; just nuke the credit card and tell them to pound sand.

Never, ever, allow pre-authorized payments out of a bank account. At most, from a credit card. Use a throwaway credit card number if you have that available.

Never share your banking information other than credit card numbers with any vendor.

Whenever signing up to pre-authorized payments is optional, make sure it's easy to revoke before getting into it.

I only do such a thing for my cell plan, which is a monthly pre-paid thing. I can go in there and revoke it at any time. If you have it set on automatic, you get some benefits, like more gigabytes.

If post-dated cheques are an option, that's not a bad way to go. Young people should learn how to write checks. (I'm using both spellings cheque and check here on purpose.)

I pay condo management fees via post-dated cheques. I write them around half a year in advance or so. They cannot cash a cheque before the date written on it. You can ask for unused cheques back: they are physical tokens, using copies of which would be fraud.

Tip: if you're under forty, ask a baby boomer in your family for a run down on cheque writing and cashing.

kazinator | a year ago

Credit card companies should have special handling for recurring billing. You should just be able to tell them “I don’t want to pay this bill anymore” and put a stop to it without having to get a new card and a new number.

PaulHoule | a year ago

I wonder if part of the solution here might be to put firm limits on the period over which subscriptions can auto-renew. That would limit the upside to these practices. Is there any real societal benefit to subscriptions lasting years without contact between the company and the user?

It should be simple to make it the law that people must affirmatively re-subscribe every 12 months, contracts saying otherwise are invalid, and charging someone for an expired subscription entitles them to twice the money back + $1000 (to make it worthwhile to fight illegal charges).

gpm | a year ago

To preface, nothing against the poster since I know they were just copying the article title.

This article headline is a bit misleading, as the FTC is not looking to ban the subscriptions themselves. Rather, they would like to implement a rule that requires servicers that provide subscriptions to make it as easy to cancel as it is to enroll, rather than the current jumbling mess that is trying to cancel something like a gym, Amazon, news, cable, or other subscription where servicers try to maintain retention by putting in a ridiculous number of hoops to jump through to cancel.

lax4ever | a year ago

I there a law preventing me from canceling recurring subscriptions on my credit card?

Why does my bank want me to write them some letter and create a case which they may or maynot look into.

Merely changing the card number wont work because bank updates vendors with the new card. I've asked but they they have to update vendors, i don't understand why though.

dangwhy | a year ago

I want this for all subscriptions, not just gym & cable. I had to waste 15 minutes of my life a few weeks ago convincing The Economist to actually cancel my subscription. They were deceitful and tried various ways of phrasing their counter offers hoping I'd slip up and say something other than "No, just cancel."

If I can sign up on the web site, I should be able to cancel with just as many clicks.

rootusrootus | a year ago

I subscribed to the NYT a few years ago and it took a phone call and a retention pitch to finally unsubscribe. I vowed to never subscribe again as long as this was in place.

Clubber | a year ago

I would support making fixed term contracts for gyms in particular (plus possibly cable) just plain illegal. There is absolutely no reason why such places can't charge month-to-month. None. Even "initiation fees" should be illegal. At least cable requires a box.

I read a story recently about Planet Fitness (IIRC). They realized that certain equipment was popular (eg free weights, racks) so they could remove that equipment and people stopped showing up but a good portion of them kept their membership. So the number of members per location is extraordinarily high. This is incredibly profitable.

I, for one, just hate all this adversarial bullshit you have to deal with on a daily basis. I don't want to fight to cancel something. It's one reason I don't pay for some publications that do good reporting because canceling those is notoriously difficult. So instead they get nothing for me but of course they've done the math and the people who don't cancel make them more money than people who don't join because of this.

Another thing: automatic price rises. Cable is the worst for this. You can go through a dance of cancelling to get a lower rate. If you don't your $60 FIOS bill will turn into $150 in a few years without intervention.

I'm so tired of the constantly nickle and diming.

jmyeet | a year ago

This is great. Maybe one day we'll see action on timeshares. I got one a long time ago that was impossible to get rid of. Fully paid for, Westgate told me it had a lot of value so I told them to just take it back, but they would't of course. I ended up just stopping all payments, went through a few years of harassing calls, and then done, nothing more. Still haunts me though, I'm afraid it could come back up with outstanding balance owed.

janj | a year ago

> The proposed 'click to cancel' rule would require companies to let you cancel a membership in as many steps as it takes to sign up.

This is actually a very smart and simple rule and I love the reciprocity of it---if it takes a click to sign up it must take no more than a click to cancel; if you want to require months of advanced notice to cancel, then you also have to wait just as many months before charging when someone signs up. Tit-for-tat.

Seems like fair game.

jabbany | a year ago

Lol the EU has done this years ago. Silent renewals for a year are forbidden now and so are cancellations that must be hand-delivered on gold paper on the third Thursday of the month between 9:00 and 9:05 kinda deals. Cancellations must be available the in all the same manners a sign-up is.

The US should really catch up to banning this consumer-hostility.

wkat4242 | a year ago

Mine had a clause if I moved 30 miles away I could cancel. And I moved to the country, so I canceled. They wanted a letter from my preacher to prove it, my power bill wasnt enough for them.

IronWolve | a year ago

You can always count on the Americans to do the right thing after they have tried everything else. - Winston Churchill

ksec | a year ago


“Click to subscribe, call to cancel” is illegal, FTC says - - Nov 2021 (860 comments)

dang | a year ago

I am extremely disappointed that US laws in almost all cases, seem to side with businesses, or at the very least turn a blind eye to very obvious consumer abuses. Actually, I’ll take that further: it seems like our system is designed to allow consumer abuse. I am shocked that our government is actually standing up for us, but I am being cautiously optimistic because lobbyists have a way of shutting that shit down real quick. Look at how ferociously corporate America has been fighting against proposed right-to-repair legislation. Yay for New York, but we need federal involvement on that one too, please and thank you.

temporallobe | a year ago

I hope this extends to every business. I wanted to cancel an arts&craft subscription package for my son (he lost interest) and had to call during business hours and be on hold forever to get through, which I never managed to do because ... guess what ... I'm f*ing working during business hours. Literally months went by before my wife, bless her soul, finally got it done (and was on hold for an hour and then had to haggle with them for another hour). Never again.

insane_dreamer | a year ago

Similar to, which you can use to give predators a credit card that you can cancel:

You can open another checking account at your bank easily, online. I use that for my book expenses and (cough) royalties. Close the account after notifying the gym in writing that you're canceling, and voila they can't charge you anymore.

(that's if the gym draws from your bank account and not by charging a credit card. You could also tell the bank to reject charges from the gym, if that works.)

AlbertCory | a year ago

Yes please, this is a legitimate course of government action. I personally am very reluctant to sign up for new subscription from smaller companies because I don't want the hassle of unsubscribing.

Tough-to-cancel subscriptions actually make it harder for small businesses to succeed because potential customers like me are reluctant to sign up for subscriptions thanks to a few bad apples polluting the market.

tryitnow | a year ago

In Canada (and probably elsewhere) it's very common for a cell phone web portal to give you a TON of power to make changes, add features, make upgrades. All automatically. But any sort of downgrade or cancellation magically requires you to call a retentions department where, surprise, the employees are incentivized to hang up on you or screw things up to meet their quotas so they can feed their families.

Waterluvian | a year ago

It should be rather simple to deal with: if the cancel method is more difficult than the method to subscribe, then the customer does not have to pay any service due if they do not want to. Or with the addendum: its up to the company who deliver the service to prove that the customer has used their service; otherwise, the other party would need to prove.

Fnoord | a year ago

Please do, they're predatory for people with mental health struggles.

macawfish | a year ago

I would like to propose an addition: “Business can’t charge the consumer’s card if the consumer has not been actively using the service for last 90 days. Active is defined as significant usage. Significant is defined as consumption equal-to or greater-than a median user in the same pricing tier.”

riantogo | a year ago

Something wrong here: government agency taking action on behalf of citizens, against corporate overlords??

dboreham | a year ago

It is so wild to read stories about gym subscriptions from here (Czechia), where gyms mostly work on "prepay principle" (buy 10 entries or 3 months in advance etc.), or you use a "Multisport Card" that will let you enter one sports facility a day almost anywhere in the country.

I have been frequenting gyms since 1998 and I don't think I have ever heard of anyone actually signing a contract with a gym and letting them charge his card. That is just not a part of the local gym culture, most gyms probably don't even have the necessary logistical structure in place to handle such contracts with repeated charges.

inglor_cz | a year ago

California law supposedly allows this but I haven't had much luck. Very recent experience was with wifi on American Airlines. I was taking a bunch of flights in a 30 day period, so I signed up for the wifi subscription. Very easy to do online. But there's no way to cancel it online that I could find. I couldn't even find "cancel" in the FAQ, and had no choice but to engage a customer service agent (during business hours) to cancel. They cancelled it, but it was a greater number of hoops than I ever should have needed.

jrnichols | a year ago

Fucking ChargePoint straight up ignores account cancellation requests, and honestly at this point my next idea is to reach out through LinkedIn contacts to their legal team to see wtf I'm not understanding here...

Zetice | a year ago

You know what's tough, is when you inherit someone else's finances, and they've signed up to things and you don't know what they are. By the same token, when you've signed up for a lot of things when you have a good income, and then years down the road, you need to clear up that stuff, especially what you don't use and what yields no goods or services.

I think it's a bank regulation now that all recurring charges must include a phone number for cancellations and inquiries, but of course that's like saying all spam needs an unsubscribe link.

NoZebra120vClip | a year ago

Wouldn't changing from a "pull" payment model to a "push" one solve all these problems?

Why don't we have a system where we can, by default, give out highly restricted payment credentials? Yeah, you CAN get a virtual card IF your bank offers or you go through a third party and set it all up as a bunch of extra hoops...

I keep thinking about joining a gym, there seem to be six within a 5km radius, but I think the best choice might be to go to the Senior Centre 15km away because I figure the city government that runs it has no motive to roach-motel my bank account.

hakfoo | a year ago

I don't understand the notion that if you cancel a credit card, a company can continue to bill you afterwards, unless they are billing you for a service you have already incurred prior to being billed (which is pretty rare - most times you pay before the next month/year of service). Enterprise contracts may add some more complexity to this, but for standard consumer subscriptions I can't comprehend why a company is allowed to bill you for a service once you stop paying for it.

babyshake | a year ago

That would be wonderful. I had the unpleasant experience of joining a gym then shortly moving several hours away. Cancelling the gym subscription was the last thing on my mind at the time.

I legit had to drive back to this gym in New Jersey to sign a form to "cancel" my membership. They would not accept a phone call, email, not even a signed letter stating my intent to cancel, even after I explained to them I had moved hours away. Ridiculous.

lp0_on_fire | a year ago

How about Congress do it? They could wrap it into an inclusive worker and consumer rights bill that bans a laundry list of predatory practices.

datavirtue | a year ago

Can they add T-mobile to the list too? You can’t unsubscribe via their website, have to call and argue with a customer retention assho… er rep.

SkyMarshal | a year ago

Once when I was without money, I had to cancel a gym subscription. Inside the gym, the manager informed me of how I couldn't cancel because of my contract. This was a mom&pop level gym, too. It's also worth mentioning that he parked his Porsche cayenne on the sidewalk.

He did let me cancel, on the condition that I acknowledged it was because a he is a good christian man.

I'm not making this up.

readme | a year ago

I got the run-around one time when I tried to cancel my membership at Planet Fatness. After my evil twin got me in trouble at the gym I made sure to bring along my 6′3″ son and my 300 pound probably-autistic and foul smelling friend (also offended by my evil twin) for backup and had no trouble canceling “our” membership.

PaulHoule | a year ago

It’s even worse for some companies. Planet Fitness makes you go in to a physical location to cancel. Complete bullshit.

jaynate | a year ago

I know it's about US but this screams to me "Germany". They are the top subscription predators on our continent. Two years duration by default, automatic renewal, cancellation 3 months in advance by post or fax. Stay away from subscriptions when dealing with entity incorporated in Germany.

expertentipp | a year ago

So- I'll pose the question from the other side because I've been in the position before- do you have any moral obligation when you know for a fact that a paying customer is not using the service you're providing?

waylandsmithers | a year ago

This situation was actually a lot worse back in the late-90s, when the consumer internet first got rolling. I recall conversations with my local ISP and my credit card company that were just bonkers.

jimt1234 | a year ago

Also the NYT! You should be able to cancel your subscription online.

insane_dreamer | a year ago

thank god we're back to having regulators doing their jobs.

I'm not sure whether to thank biden or anyone-but-trump or something else - but whoever is responsible, *THANK YOU*.

asah | a year ago

I really like the idea of having a hard limit of 'clicks' to get something done/undone. If it's 4 clicks to subscribe, it should be no more than 4 to unsubscribe.

1970-01-01 | a year ago

I have gotten some fraudish autopays canceled by having my lawyer send a certified letter that we'd take action if it happened again. Cost a few $$...worth it.

kjs3 | a year ago

I had a gym that I signed up online for, I tried to cancel one day in person and they said I had to fill out a questionnaire and mail it to cancel. Fuck that company.

weezin | a year ago

This is why I pay most bills with a push rather than a pull.

ztetranz | a year ago
voytec | a year ago

I hate uncancellable subscruptions too, but under what authority can the FTC just ban these subscriptions? I had a similar issue with their ban on non-competes.

marcell | a year ago

How about those sneaky add-on subscriptions in Amazon Prime (via Prime Video and Music)? Lots of people complaining that there was auto-enroll happening.

brutusurp | a year ago

They should mandate unsubscribe like how they do with email, make it like apple app’s subscription, you just sign in and cancel with a tap.

m3kw9 | a year ago

What about NYTimes and the only cancel via phone?

dwighttk | a year ago

> Khan said it likely wouldn’t apply to non-commercial services like recurring political donations, which have also left some donors feeling scammed and tricked.

Khan knows how to stay clear of politically intense scenarios. She also has not gone against Amazon which was the entire thesis of her paper. Assigning Khan into this position forced Amazon to cozy up to politicians, and keep funding them in some shape or form. This was a net gain for both parties. This was a net gain for politics.

nashashmi | a year ago

hit NY Times too please.

yieldcrv | a year ago

The principles should be that the same methodology used to signup should be used to cancel.

Online signup -> online cancel.

SMAAART | a year ago

yeah, and don't forget those "timeshares" abominations (cf latest last week tonigh).

sylware | a year ago

How about the tuff to cancel WSJ?

dikaio | a year ago

I assume the side effect of this happening is that everyone's rates will go up.

ipqk | a year ago

Can’t wait for all of the deceptive corporate marketing against this!

benguild | a year ago

think thrice before i subscribe to the economist ever again.

xiaodai | a year ago

This is going to be amazing if you can time it.

kumarski | a year ago

I hope this includes gym memberships!

tipoffdosage904 | a year ago

I hope this included gym memberships!

tipoffdosage904 | a year ago

Timeshares too I hope.

baron816 | a year ago

is there a link to provide public commentary?

asah | a year ago

About time.

consultSKI | a year ago


lacoolj | a year ago

Go gettem.

Mizoguchi | a year ago

But those unused gym subscriptions subsidize the gym membership i do use. Please don't take that stimulus away.

whydoineedthis | a year ago

Misguided priority IMO. Silicon Valley's actions are much more egregiously and obviously criminal than even the worst gym.

As tough to cancel as some gym memberships are, they at least usually spell out their precise cancellation procedure as a part of a contract and have multiple ways to get in touch with some human to deal with a situation. And there's always some path to cancel the service (even if it's annoying by design and has you jumping through multiple hoops). And with these gyms, as a last resort you at least have a chargeback as a fairly realistic option with no consequences to your life.

What I'd like to see investigated in this vein is Silicon Valley companies who provide no human customer service. Your only recourse in the event of a flawed transaction is either suck it up and take the loss, or do a chargeback and risk having your entire digital life destroyed as they retaliate against you by locking up your account. What these companies do to people daily is criminal on a level that the worst gym can't even fathom.

logicalmonster | a year ago