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FTC announces "click-to-cancel" rule making it easier to cancel subscriptions

(www.ftc.gov)
1737 points pseudolus | 1 comments | 16 Oct 24 13:09 UTC | HN request time: 0s | source
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TheAceOfHearts ◴[16 Oct 24 15:10 UTC] No.41859989[source]▶
It would be great to see the FTC go against predatory subscription services like Adobe. I'm fuzzy on the exact details, but I think they promoted a yearly subscription that was meant to look like a monthly subscription, where if you cancelled early they would charge you an exorbitant cancellation fee. I'm not sure how these new rules affect them.

One recent idea I've had is that many online subscription services should automatically pause if you stop using it. For example: if I go a full monthly billing cycle without watching Netflix then my subscription should automatically pause and allow me to resume it next time I log-in. There's a ton of money that gets siphoned off to parasitic companies just because people forget to cancel their subscriptions or because they're too busy dealing with life. It might not be viable for all companies, but there's definitely a lot of services where such a thing would be possible, given the huge number of customer analytics they collect. Maybe give people the option to disable such a pause feature if they're really determined to keep paying for a service. But a default where subscriptions automatically pause if you're not using them makes a lot of sense from a user perspective. Of course businesses would probably hate such a ruling because it means they can't scam as much easy money.

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arrosenberg ◴[16 Oct 24 15:32 UTC] No.41860279[source]▶
> I think they promoted a yearly subscription that was meant to look like a monthly subscription, where if you cancelled early they would charge you an exorbitant cancellation fee. I'm not sure how these new rules affect them.

I don't think it's the same situation. What Adobe was doing was offering a yearly subscription, charged monthly. If you tried to cancel, it would ask for payment to either cover the rest of the sub or to cover the "savings" that the user had obtained by selecting an annual sub rather than a true monthly (can't remember what exactly it tried to charge). It was deceptive as hell, but it's probably not covered by this rule.

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megiddo ◴[16 Oct 24 17:12 UTC] No.41861412[source]▶
I mean, maybe technically.

But the "its yearly with a cancellation fee" was not qualified in the sales information on the sign-up page. Maybe it was in the fine print.

Given that customers are quite used to a monthly fee is a monthly subscription model, it was disingenuous at best. Putting significant terms in the fine print doesn't exactly engender trust.

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llm_nerd ◴[16 Oct 24 18:05 UTC] No.41861902[source]▶
https://imgur.com/a/ldhiEtf

There is no fine print. It is extremely clear and obvious. If you see a term called "Annual paid monthly", 33% less expensive than a monthly option right above, what possible other interpretation can someone have?

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arrosenberg ◴[16 Oct 24 18:39 UTC] No.41862298[source]▶
I think they clarified it more recently, because the FTC is taking a separate action against them on this specific issue. I doubt there would have been much of an issue if it had been that clear in the first place.

https://natlawreview.com/article/ftc-targets-adobe-hidden-fe...

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1. llm_nerd ◴[16 Oct 24 18:49 UTC] No.41862419[source]▶
A few years ago it still had the three options (monthly, annual billed monthly and annual prepaid) but didn't -- at least on the first page, though it did when you confirmed your transaction -- have the specific notice about an early termination fee. It still seemed like something where any rational person would ask themselves "what sort of idiot would pay 33% more for `monthly' when there's this no downside annual paid monthly thing? Got em!", but I guess there was some argument for being bamboozled.

But it is the way it is now for at least three+ years. People are still thinking they're beating the system.

Does it try to ensnare users trying to save some money now? Sure, it does. It offers some revenue planning for Adobe in return for a discount. The FTC is basically arguing that there shouldn't be such a discount.