FTC To Crack Down On Companies That Make Cancelling Services A Pain In The Ass
from the a-bit-overdue dept
Making it annoying to cancel a subscription has long been a proud American pastime. AOL was notorious for making it extremely difficult. Broadband and cable providers routinely make it a pain in the ass to cancel phone, broadband, or cable. And everyone from the Wall Street Journal to SiriusXM enjoy making signing up easy, but cancelling something that requires a phone call and time on hold. In COVID times, with support staffs often short handed, it's a practice that's become more annoying than ever.
In an about face from decades of regulatory apathy, Lina Khan's FTC has announced that the agency is going to start cracking down on companies that trick users into signing up for services, or making it an annoying headache to cancel:
1. Given complaints about unauthorized charges & impossible-to-cancel billing, FTC has issued a policy statement making clear that firms that trick customers into signing up for subscriptions or trap them when they try to cancel are breaking the law. https://t.co/y0LkZWvVFY
— Lina Khan (@linakhanFTC) October 29, 2021
According to the full FTC announcement and the company's new enforcement policy statement, the FTC is going to start cracking down harder on companies whose sign-up process fails to provide clear, up-front information, fails to obtain consumers’ informed consent, or fails to make cancellation easy (a lot of companies are horridly designing new website or app cancellation buttons and menus as you read this):
"Marketers should provide cancellation mechanisms that are at least as easy to use as the method the consumer used to buy the product or service in the first place."
It's hard to overstate how feckless regulatory enforcement has historically been on this front. Especially in sectors like telecom. Remember when journalist Ryan Block recorded his eight minute phone call trying to cancel Comcast service? And remember, despite significant public and press outrage, Comcast faced absolutely no accountability courtesy of limited competition and regulatory capture? In countless industries (even those that are more competitive) that's effectively the norm.
The FTC voted 3-1 to approve the new policy statement, the one dissent (pdf) coming from Donald Trump appointee Christine S. Wilson on what she claimed was procedural grounds. Of course saying you're going to crack down on this, and actually cracking down on the absolute parade of companies that engage in these kinds of behaviors is something else entirely. Especially for an agency with limited staff and resources. Still, in this age it's refreshing to see regulators simply do their job when it comes to simple proposals with broad bipartisan public support.
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Filed Under: canceling, ftc, subscription fraud
Reader Comments
The First Word
“Just as I am tryiny to lower ISP bill
Oh this is almost humor because I beed to lower my Comcast bill. And their customer service people are "don't let them cancel" flogged.
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Just as I am tryiny to lower ISP bill
Oh this is almost humor because I beed to lower my Comcast bill. And their customer service people are "don't let them cancel" flogged.
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Gym Memberships
Soon, Gym memberships will be walk in only, require a tour of the gym, Demand 4 hours of paperwork and a blood test.
This is of course the end result when the law says "As easy as it was to sign up", everyone in the industry makes signup a difficult and annoying process all at once so they can remind people when they cancel all the shit they had to do to sign a dumb gym membership.
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Try cancelling a Gym membership
It took us over a year to cancel a Gym membership.
It seems that anybody at the gym could sign you up but only the manager could do the cancel.
First they were... you owe us money... can't cancel til then.
Paid what they said we owed. They still did not cancel and continued charging monthly fee. Had CC company block any new charges from the Gym. Again couldn't cancel because we owed money. Asked to speak to manager.. not in today and could never answer on when manager would be in.
Finally took everything to BBB and lo and behold. Case was closed and membership cancelled.
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Maybe some companies will learn that if it is easier to cancel, it also may be easier to convince people to subscribe.
In my country, we had similar rules introduced a few years ago (cancelling must be as easy as subscribing, and automatic renewals can be cancelled every month). Some services actually saw an uptick of new subscribers who didn't dare to subscribe due to past experiences.
Note that this is the same argument companies use when it is about hiring and firing people: "it shouldn't be too hard to fire someone, because that will make us reluctant to hire someone."
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Re: Gym Memberships
Interesting note:
Using Planet Fitness as a case study, Planet fitness doesn't make money on you using the gym. Gyms cost 100s a month per person and struggle to make ends meet because space and equipment maintenance is expensive. Old-school hyms seen in films are constantly on the brink for this reason, and they are always chasing membership dues because a lot of muscle dudes start blowing off work to train. PF makes money by you paying for a gym, but not actually using it. They do not have enough equipment for everyone to actually use it.
They care about bulk memberships.
A huge part of pulling that off is making signup seamless. You can do it online, They will give you several months free and a stack of goodies....all to get that membership. But you have to go in person to end the membership, playing on the guilt that generates, the gambler's sunk cost fallacy.
Making signup difficult kills the entire scam. Your dog eared copy of anti-regulation rhetoric for dummies is showing.
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"Marketers should provide cancellation mechanisms that are at least as easy to use as the method the consumer used to buy the product or service in the first place."
Government is very naive.
This statement makes total sense, but it will never happen until there is a punishment for not doing it.
Its also hysterical when there are several notorious companies who literally are the only game in town & still make it difficult for customers who are fed up to get away from them.
ProTip (for industry): Happy consumers don't want to leave. Perhaps instead of trying to make it more difficult you should consider what the fsck you are doing to them to make them willing to undertake the massive hassle to tell you to fsck off.
One would think that even small improvements to the services would be cheaper than paying retention agents to make people hate you that much more.
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Re:
It's funny you should mention this, because my first thought on reading this was that I could sign up for SirriusXM in my car for long road trips again! I did it once before (we were traveling through sparsely populated parts of Northern MI, so limited streaming) and it was such a pain in the ass to cancel, I said I would never do it again. Now it might actually be an option.
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May be I am the odd man out, but my effort to cancel Comcast (about 2 years ago) was the easiest ever. The operator said they were sad to see me leave after 16+ years. I mentioned I moved to a local provider and she cancelled the service and they sent me a refund for the remaining 8 days in the month-to-month payment. All done in a few minutes.
May be it's the California laws that made my experience so much better!
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Re: Just as I am tryiny to lower ISP bill
Please... don't let trying to get the first word in stop you from using spellchecking.
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Re: Re:
Wait for confirmation that SiriusXM has changed their ways first.
Otherwise, like Fry trying to make a collect call, "you have chosen a slow and horrible death".
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be better to stop companies from forcing people to start these services in the first place!!
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Re: Re: Gym Memberships
I know where your going here but there is also a class of goods that his highly desirable AND hard to get.
If any one Gym goes this way the plan fails, however markets quickly pick up what competitors are doing and you could easily see many Gyms rebrand as "Ultra exclusive, be really happy we took you" type places.
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Obviously cancelling your service is an act to reduce the service provider's profits, and the service provider simply will not stand for that.
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Re:
How dare you die, we will send your estate for the full 10 year contract and demand renewals unless you send us a letter in writing from the person who signed up, at least 10 days before the end of your contract but no more than 20 days before you must renew.
If you fail to do the above you also agree that any children you may have will also agree to the above contract and payment terms.
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Factually wrong. The WSJ let's you cancel via the account web page without talking to any body. When they had 3-month free trials I did it twice. (Note: Their subscription is relatively expensive).
The New York Times, on the other hand, makes it extremely difficult to cancel. When I needed to do that I had to do it via my credit card because of restricted help hours and impossibly long wait. Very annoying! (Note: After finally cancelling, I noticed I could still read and even comment using my account, while getting subscription reminders - so that's a plus.)
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Re: Re: Gym Memberships
Get a bike and go aerobic.
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Re: Re: Just as I am tryiny to lower ISP bill
There was somebody else that used to do that. He would post something, then immediately make it the first word (regardless of it being the first post) and when somebody called him out, he hasn't been around since. And this guy was mostly troll, but sometimes insightful (although rarely)
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The FTC is a company now? ;)
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I have found that if I just tell customer service that I am flat broke and I can no longer pay for the service, there is no rebuttal they have.
After the first or second "But what if we lowered ..." type hook, and with my response of, "why can't you understand that I have no money, cancel my service" they realize that there is nothing they can do to keep my account.
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no to exclusives & yes to modding
If I were king:
-the same "unlicensed emulators" that are used by PC gamers would be legal to download and use in consoles. This would allow for historic preservation of games
-all exclusives would be time based, and can't be 'exclusive' for more than 365 days
Again, I liken it to cars. All cars-->(consoles) drive on public roads-->(games). Why buy one all wheel drive hatchback (VW Golf R), when you could buy a different all wheel drive hatchback (Subaru WRX STI)? Because you like the aesthetics of one over the other, and aesthetics can't be quantified...because one has a faster 0-60mph than the other...because one has better gas milage than the other...etc.
Why choose one console over the other? The GUI, the game network (chat, 4k movie streaming services, etc.), the backwards compatibility list and setup (you can buy old games on one console, but you have to pay a $ubscription to play old games on the other), one console supports ATMOS surround sound and the other console does not, etc. etc. etc.
Exclusives will die one day.
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apologies, but...
... did you miss what the topic of this post is?
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Re: no to exclusives & yes to modding
Wrong tab buddy!
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Re: Re: Re: Gym Memberships
Planet fitness exists because that type of gym scared people away from gyms. and frankly, I'd love to see them make gyms "highly desirable" with 4 hours of paperwork and costing hundreds of dollars a month upfront when most of America can't be fucked to walk in the door for a free month.
I am struggling to understand the argument that goes:
A)Poorly Desirable goods/services make getting a subscription easy so they can rake in money.
B)Poorly Desirable goods/services use difficult-to-stop subscriptions to retain subscribers.
C)Let us force them to make unsubscription as easy as the subscription because they rely on easy subscriptions to get you in the door.
D) Highly desirable goods/services are often limited by demand
E) Highly desirable goods/services often use restrictions on access to manage limited supply
F) Per supply and demand this results in a premium price justified by the demand.
G)therefore we should be concerned Poorly Desirable goods/services will institute access restrictions and price increases?
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Re: Re: Re: Re: Gym Memberships
In this case your looking at more of a situation where "once we get you we never let go" and stamp it all over the industry. And if you think luxury goods with high prices are limited by production your not paying attention to the luxury market, its all about excluding people to make its members feel special.
Gyms are desirable goods for many reasons, from New Years resolutions to friends who go to the same gym as you and trainers. Gyms actully do offer a service.
The point is more that with a law like this, a collection of Gyms in a geographic area could all take the worst case situation and make cancellations the worst possible process immiganable. The money here is all in the very long tail of memberships that have stopped coming but still pay.
I know your thinking, "This could never happen", but look how fast every dang contract now uses mandatory arbitration, Every phone company defines unlimited as "some made up big number" and people still go to french restaurants despite being insulted by their staff.
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If something like a gym membership is harder to cancel than to subscribe, the fine should be at least 1000x times the potential profit they tried to steal.
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Re: Gym Memberships
"This is of course the end result when the law says "As easy as it was to sign up", everyone in the industry makes signup a difficult and annoying process all at once so they can remind people when they cancel all the shit they had to do to sign a dumb gym membership."
I spy some similarity with the online registrations of certain companies. I used to play the SWTOR MMORPG for awhile, then took a hiatus, and coming back found that I'd have to register accounts with EA and run the grand loop around just to try to reopen my player account just to verify my bioware account.
Same as with DCUO. Two games I've now given up on because the last thing I want in my spare time hobbies is crippling inconvenience and red tape.
Meanwhile Blizzard keeps nagging me every now and then to come back to the old WoW demo account despite all attempts to unregister from their mailing list.
Bad processes and shoddy routines combined with registries of customers kept way past their best-before date is a menace. Even worse so that although this may be inconvenient on a consumer level, consider that national security and law enforcement lists like the no-fly register and organized gang list are kept the same shoddy way.
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Re:
Offering good service is expensive
Being an asshole is free
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Re: Re: Re: Just as I am tryiny to lower ISP bill
Do other people pay attention to first/last word? I just scroll past because I'm planning to read the comment in context anyway and I don't care to read it twice.
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Re: Gym Memberships
Quitting the gym: https://www.youtube.com/watch?v=oh8PFs0LTKc
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Re:
I've heard that if you say "God spoke to me, and told me to spend all my money on ammunition" then the customer service rep will cancel immediately to get off the call as quickly as possible.
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