The Federal Trade Commission (FTC) wants to stop businesses and news outlets from making it difficult for people to cancel subscriptions. Many mainstream news outlets lock in customers by ensuring that signing up is easily done online, but canceling a large number of subscriptions requires the old-fashioned method of making a phone call.
The Nieman Lab conducted a survey to investigate why people canceled subscriptions to news. During the survey, most people described the call-to-cancel practice as “shady,” an “annoyance,” “oppressive,” and “ridiculous.”
Businesses and publishers use the call-to-cancel policy as a way to retain subscribers. A study investigating 52 news organizations in the US concluded that 59% make it difficult to cancel subscriptions online, and more than 50% trained customer service personnel to convince customers not to cancel subscriptions.
The FTC announced that it was going to crack down on companies that do not provide an “easy and simple” online cancellation solution. The commission said the cancellation process should be “at least as easy” as the subscription process.
The commission made it clear that making it difficult for customers to unsubscribe is illegal and one of the “dark patterns that trick or trap consumers into subscriptions.”
The FTC announced new guidelines to address what it called “negative option marketing.” It not only includes call-to-cancel policies but also other questionable practices such as automatic renewals and unauthorized conversion of free trials to paid subscriptions.
The guidelines stated that businesses should make “clear and conspicuous” disclosures about their subscriptions, including “each deadline by which the consumer must act in order to stop the charges,” “the amount (or range of costs) the consumer will be charged or billed,” and “all information necessary to cancel the contract.”
The guidelines also provided new rules for customer service representatives:
“In implementing effective cancellation procedures, marketers should not, among other things: hang up on consumers who call to cancel; place them on hold for an unreasonably long time; provide false information about how to cancel; or misrepresent the reasons for delays in processing consumers’ cancellation requests.”
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