- Consumers and advocates are fed up with it being incredibly difficult to cancel subscriptions.
- Democratic Rep. Mark Takano plans on trying to tackle the topic again this Congress.
It's the new streaming show you can't miss. The one-time gift that you probably forgot about. The New Year's resolution that started strong, but by February you're having second thoughts. Whatever it was, it's a subscription now.
Today, you can't escape subscriptions. They encompass everything from our binge-watching to our meal kits to books and makeup.
It's when you want to cancel that things get tricky. The struggle frustrates even the professionals who deal with this. Do you need show up somewhere in person? Click through a maze of prompts? Call a hotline? That is if you even can find the number, which can take a "National Treasure"-level of sleuthing skills.
According to Pymnts.com, a site that tracks e-commerce, just over 80% of American households held a subscription near the end of last year. And while the retail industry is seeing subscription numbers decline, you can be sure it's been a pain for consumers to get free.
Advocates are pushing for Congress to act
Congress has tried twice already to make it easier for Americans to unsubscribe. Rep. Mark Takano, a California Democrat, told Insider that he plans to reintroduce The Unsubscribe Act for a fourth time later this year. Consumer Action and National Consumers League have helped push the legislation in past.
"Deceptive practices by large corporations make it easy to sign up for subscriptions, but nearly impossible to opt out," Takano said in a statement to Insider.
The bill would require companies to be upfront when they roll a free trial into a paid plan without expressly telling you, a practice known as negative option billing. The legislation would also require a company to offer a straightforward cancelation process. That would mean that a company that lets you subscribe via an app can't then require you to come in person to cancel.
Sen. Brian Schatz, a Hawaii Democrat, has worked on companion legislation in the past. His bill had the distinction of garnering bipartisan support, including Sen. John Thune, the No. 2 Senate Republican.
Getting any bill passed in a divided government will be daunting, but the prospect of bipartisan support could offer a glimmer of hope though.
Hard-to-cancel subscriptions are a widespread business model across many industries
Consumer advocates that Insider spoke to said they were turned onto this issue by their own struggles.
Ruth Susswein, director of Consumer Action, was taken aback when she noticed that what she thought was a one-time gift had actually turned into a recurring charge, thanks to an automatic renewal clause that was buried in the terms of service.
"That is more than just an inconvenience, that is not the way anyone should be doing business," Susswein said. She added that companies must find it cost-effective to automatically enroll consumers without concern for those who might object or for potential legal issues with regulators or attorneys general.
John Breyault, an official with the National Consumers League who focuses on telecoms and fraud, said that his organization was turned onto the topic after they realized their office furniture lease had an automatic renewal.
"We weren't aware of the automatic renewal provisions of the contract," Breyault told Insider. "We had to fight like heck to get out of it."
"If it happens to us, it happens to consumers and nonprofits and businesses all the time," he said.
Search any social media thread about subscription woes, and you'll see some frequent offenders.
Adobe is so notorious for its use of cancellation fees that users have developed workarounds. A representative for the company to did not respond to a request for comment.
Many complaints are devoted to publications, an American Press Institute survey in 2021 found that only 41% of US publications made it "easy" for readers to cancel their subscriptions online. The New York Times used to direct subscribers to either a virtual chat or a hotline. Only last year did the Times begin to allow digital subscribers to cancel their subscriptions directly, Times spokesperson Charlie Stadtlander told Insider. He added the publication hopes to soon make this available to all print subscribers soon — currently only some can use this method.
Planet Fitness is up front that its members must cancel at a gym or by mail, even if they can sign up online.
"Our standard cancellation policy, which is outlined for members upon joining, notes that cancellation in person or via written mail notification is required," said McCall Gosselin, senior vice president of communications and corporate social responsibility at Planet Fitness in a statement to Insider.
Gosselin added that they have added the ability to digitally cancel in some states and are exploring ways to expand access to that function.
Biden could do something about it
The Federal Trade Commission could also use its policies to go after companies. It has in the past.
The FTC fined Vonage, an online phone service, $100 million after the agency alleged that the company used "dark patterns" that made it difficult for customers to cancel. In some cases, the agency alleged that the company continued to charge customers even after they hunted down the cancelation hotline number and spoke to an actual person. In October 2021, the FTC issued an enforcement policy statement making it clear that it was putting companies on notice if they made subscribing easy and canceling far too difficult.
The problem is so large though, Breyault cautioned that the agency can't tackle it alone. He added that the FTC has so many different responsibilities, including crypto, that it looks for only the most egregious defenders. Passing the Unsubscribe Act would give the federal government additional legal authority to hold companies accountable beyond the FTC's overall powers.
There's precedent for executive action working on this, but it's mostly abroad.
Amazon agreed to change how users cancel its Prime membership after European regulators, US consumer groups, and, finally, the FTC stepped in. Before the tech giant changed its practices last summer, Public Citizen, another US consumer group, published a video showing the long process it took to cancel the service. It was an odd juxtaposition for a company that makes purchasing with just one click a huge part of its model.
—Public Citizen (@Public_Citizen) January 14, 2021
State and local officials have also taken notice.
Then-DC Attorney Karl Racine went after the food delivery service Grubhub for hitting customers with hidden fees and using deceptive marketing about its subscription service. The company later agreed to pay an $800,000 fine and an additional $2.7 million to settle the suit.
Still, the chances of a bill passing this Congress a longshot. President Joe Biden called out consumer-related issues in his State of the Union, but it's unclear where unwanted subscriptions fit in.
While consumers wait for regulation, the situation is so bleak that some companies are now devoted to helping you get out of the pile of undesired subscriptions.
Naturally, you often have to subscribe for that, too.