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.
Filed Under: canceling, ftc, subscription fraud
