A new bill in California, dubbed “Click to Cancel,” has been signed into law. It requires companies to make it as quick and easy to cancel subscriptions as it was to subscribe in the first place.
Thanks to FTC interest, with Adobe being specifically called out on this, the provision may also become federal law …
Click to Cancel
California’s law was introduced in response to sketchy practices by many companies around subscription services. Whether it’s a streaming video app or an internet package, subscribing may take only a couple of clicks, but unsubscribing can be much more difficult.
In the worst of cases, cancelling can only be done by phone, which may mean literally hours of being put on hold and/or passed around between departments. California’s Click to Cancel law – officially known as AB 2863 – is designed to fix that.
The bill requires companies offering automatic renewals and continuous services to provide consumers a means to cancel the subscription using the same medium they used to sign up; for example, a person who subscribes online has to be given an online click-to-cancel option. This ensures that consumers can easily exit from services they no longer want, without being trapped by confusing processes or hidden fees.
The FTC has proposed a federal law
The Federal Trade Commission (FTC) last year proposed making this a nation-wide requirement.
The proposed rule would require businesses to make it at least as easy to cancel a subscription as it was to start it. For example, if you can sign up online, you must be able to cancel on the same website, in the same number of steps.
The FTC subsequently launched an investigation into Adobe after customers accused the company of shady practices in this area.
One issue is consumers trying out a subscription and then forgetting to cancel. With Adobe, you can only cancel within the first two weeks, otherwise you are charged a proportional fee. Additionally, Adobe does not issue an annual reminder of your subscriptions, as some companies do – instead, the account simply auto-renews without notice.
California is giving companies plenty of time to adapt: the new law only takes effect in mid-2025.
FTC: We use income earning auto affiliate links. More.
Comments