Financial Protection

Is your automatic subscription renewal hard to cancel?

Were you surprised when a “free” trial subscription renewed for a big fee? Was it easy to sign up but hard to cancel?

Was joining easy but cancelling like being trapped in a “roach motel? or the “Hotel California?” You  could enter but you could never leave?

Did you sign up with only one-click online but found out you could only cancel by telephone? Or, if you could cancel online, why were you first forced to click through five screens filled with messages like “wait, are you sure you want to stop receiving important benefits?” And why was the box to continue your subscription in large colorful bold print, but the cancel box in small grey-ish tones?

Or, when you signed up for concert tickets or train or airline reservations, why did you have to pay for extra insurance to guarantee your seat unless you clicked no? “Are you sure you don’t want this guarantee?  “Are you really sure?”

The good news is that two government consumer watchdogs — the CFPB and the FTC — are cracking down on so-called “negative option marketing” and the use of “dark patterns” or “deceptive design” to lock consumers into subscription renewals or pay optional add-on fees.

For example, in January, the CFPB said it “agrees with the FTC that sellers would likely violate the law if they erect unreasonable barriers to cancellation or fail to honor cancellation requests that comply with their promised cancellation procedures. Such conduct would include, for example, “[h]ang[ing] up on consumers who call to cancel; plac[ing] them on hold for an unreasonably long time; provid[ing] false information about how to cancel; or misrepresent[ing] the reasons for delays in processing consumers’ cancellation requests.”

In January, the FTC also finalized a $3 million penalty action against Credit Karma for allegedly using dark patterns to promote phony preapproved credit cards offers.

We’re backing these excellent moves by the agencies. Here’s our coalition letter (bonus: cool video!) urging the FTC to make it easier to cancel Amazon Prime. And here are our PIRG tips to avoid dark patterns that allow apps to collect more data from you.


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