Legal Grounds for Canceling Subscriptions
The ability to cancel subscriptions is a right that is often protected by various consumer protection laws and regulations. While the specific rights depend on the type of service or product, the nature of the subscription, and the governing law or regulation, there are a few central concepts that are widely applicable. For example, many states regulate subscriptions for free trial periods. These consumer protection laws require companies to: Such laws also often require that, at the start of a subscription or free trial or delivery of physical goods, the company obtain the consumer’s informed consent to the subscription, including consent to automatic billing at clearly stated intervals. Most states also prohibit certain unfair and deceptive acts or practices in the advertising and sale of subscriptions . To that effect, the Federal Trade Commission (FTC) maintains a glossary of terms and resources for consumers, including a guide on the subscription business model. One of the most common violations is offering a "free" trial without clearly or conspicuously informing the consumer of any limitations, such as that the consumer will automatically be charged after the free trial period ends if the subscription is not canceled. In a number of cases, the FTC has brought enforcement actions against companies for this type of conduct. The FTC has indicated that in many such cases, consumers who take advantage of the "free" trials end up remaining subscribed. The FTC states that in such circumstances, "[C]onsumers aren’t really trying out your products for free. Instead, you’re secretly trapping them until they realize they don’t want the subscription and actively unsubscribe or object to a charge."
Issues Related to Subscription Cancellations
Many consumers struggle with the cancellation process in the face of confusing language in a subscription agreement that establishes a minimum contract term or an automatic renewal term. For example, a gym may offer a free trial, and require the consumer to affirmatively agree to an automatic renewal term in order to accept the "free" trial membership. If the consumer does not do so, the consumer is locked into a long-term contract and on the hook for expensive membership fees. Many companies avoid automatic renewals, but do have subscription agreements that create minimum contract terms. Some companies combine both of these features common in long-term contracts into a confusing mess of fine print – if you don’t believe us, check your cable, internet or cell phone agreements. They create these contractual clauses because they are hard to get out of and product returns cannot be made, nor are return policies given. This comes into play when looking at subscription agreements because not only is the deal too good to pass up, it also requires a minimum contact term in order to accept the deal. Some companies may use a different tactic of automatically opting a consumer into the contract instead of requiring affirmative consent. For instance, a trial membership turns into a paid subscription, unless the consumer opts-out of the paid subscription before the trial ends. Failure to cancel on time results in the consumer being billed for additional months. Even if a consumer is able to find the right button to click to cancel the subscription, they may face another obstacle. Some online subscriptions utilize a confusing button or an obscure link. In order to trick a consumer into providing continued consent, the button will read something like "Confirm continued subscription" when the consumer actually wishes to click "Cancel subscription." So, the consumer thus unknowingly consents to the continued subscription, and presumably the continued costs.
How to Legally Cancel a Subscription
Under the law, cancellation requests often must be made in writing. However, states vary on the requirements for writing. Therefore, it is important to do research as to which is required in the state where you live. In addition, if there are certain qualities to the subscription (for example, if it renews automatically) the only way to legally cancel may be through an early cancellation letter, depending on your state’s laws. If you fail to abide by your state’s requirements as to how to cancel, your cancellation may not be valid, even if the subscription provider did not inform you what they were.
Whether a cancellation request can be accepted by phone, email, or in writing depends on the type of subscription and the specific terms of your contract. Some subscriptions require cancellations to be made in writing, while most require contacting them by phone.
Tip: If leaving a message with the subscription provider’s voice mail system, save a digital copy on your cell phone or leave a voice mail on their cell phone number so that you have a record of what you said.
Regardless of how you make the cancellation, you should keep detailed written records, with dates, of when you made the request and what was said. You should follow up by email with a copy of the cancellation request and/or say that you’ve left the cancellation request on their voice mail because you do not want to face a situation where the provider claims it never received your request.
If you make the cancellation request in writing or via email, be sure you send the request to the right person.
Tip: Send a copy to yourself before you mail it so you have a record of what your request looks like.
In addition, if you are not sending the cancellation request via certified mail, be sure you mail it to a place other than your home or your primary work address. This is not just good advice for people with stalkers. If the subscription provider takes some time to send back a lame response and you want to catch them lying about when they received your cancellation request, a third-party mail drop will give you better accuracy. The reason for this is that mail is not as closely monitored at primary residence addresses, especially for emails, which sometimes get lost.
Tip: If cancelling an email subscription, be sure to close your email account after sending the cancellation request.
After cancelling a subscription, you will want to stay on top of the billing. Keep a written record of everything and quickly contact the subscription provider if any charges continue to post after your cancellation request was made.
Consumer Protection Agencies and Resources
Consumer protection agencies can provide significant help to consumers attempting to cancel subscriptions, especially when your efforts have been met with resistance. In many cases, companies and organizations engaged in deceptive practices or legal violations will treat complaints filed with consumer protection agencies, and similar organizations, as serious matters.
Complaints can be filed with:
The Federal Trade Commission
The Better Business Bureau
Consumer Financial Protection Bureau
State agencies, such as the State’s Attorney General or consumer protection agency .
If you are not able to find the subscription or its parent company, you can use a search engine, such as Google, and type in the name of your subscription, with "help center" after it. This often leads to the company’s website, which can be searched for help information, or a page with information on how to contact the company.
Another option is to post a message on reddit r/legaladvice. While this option requires the use of reddit, which has age restrictions and may require the use of a VPN depending on your location, it can provide good information if you need assistance with cutting through the red tape of customer service representatives.
Legal Actions Against Unlawful Subscription Practices
Consumers unhappy with the outcome of a subscription cancellation may explore legal options. One potential course of action includes filing a complaint with the Federal Trade Commission (FTC), the Better Business Bureau (BBB), or both. The FTC does not take direct action on behalf of consumers, but it does use the information it gathers to put pressure on companies to improve their business practices. A BBB complaint is a more public venue, allowing customers to air grievances for the benefit of other consumers. Both options are free to consumers.
In particularly egregious situations where a consumer believes that a company has not just acted unfairly but also violated federal or state law (e.g., the company engaged in unfair, deceptive, or abusive acts or practices; it marketed to consumers aged 16 and under without properly notifying the parents or guardians of the subscription terms and conditions; and/or it disregarded consumers’ cancellation requests), then the consumer may wish to pursue a lawsuit. A lawsuit may be initiated through Small Claims Court if the amount at stake is below the state threshold.
Beyond arbitration, standard court litigation options, and filing complaints with self-regulatory agencies, other actions consumers may consider include:
• Certain states allow consumers to report unlawful "negative option" practices to the state Attorney General;
• Consumers in some states can file a negative option complaint with the state Department of Consumer Affairs;
• Consumers may seek filing with the state Commerce Commission if they feel that a violation of the state’s Uniform Commercial Code is being committed;
• Consumers with additional questions or concerns can reach out to the state Commerce Secretary’s office; and
• Consumers can request a congressional investigation through their local congressional office.
Some companies are not in compliance with the federal and/or state laws governing subscriptions. Recourse for this situation can include filing a complaint against the company with the relevant state consumer protection office or other government agency, or contacting an attorney or other consumer advocacy organization for assistance seeking a solution. The Better Business Bureau is also an option, and Section 5 of the FTC Act may provide relief for egregious actions.
Court Cases Involving Subscription Cancellations
AmEx v. Italian Colors Rest., 133 S. Ct. 2304 (2013)
One of the highest-profile cases surrounding subscription cancellations occurred in the form of a class action against American Express. When American Express’s advertising strategies took hold, merchants complied with the high fees that were charged on credit card transactions for fear of alienating powerful customers. In doing so, however, the merchants and AmEx found themselves at odds with each other when the fees became overreaching. A group of small business owners, including an Italian restaurant in San Francisco, filed a class action lawsuit against AmEx alleging that the company violated antitrust laws by setting excessive fees. Because the contract between the merchant and AmEx required that any claim against the company be resolved by arbitration in New York, the restaurant owners were forced to proceed with arbitration. At the time, AmEx’s contract required that arbitration proceedings would be conducted in individual forms, meaning that the restaurant owners could not join their claims with other plaintiffs. Despite the fact that the restaurant owners were entitled to recover substantial damages, the Supreme Court found that the expense of arbitration would essentially prevent the restaurant owners from proceeding against AmEx because it would cost them more in attorney’s fees and expenses than they would be able to recoup. Any sensible person would not spend the money to file a small claims action without knowing the outcome because there’s a risk that a judge could find against the courts. Therefore, the consumers had no reasonable means of recovering monetary damages and, as such , were forced to sign a competition agreement. The Supreme Court decided that class action waivers are enforceable even where the prohibition of class actions effectively precludes any effective means of recourse.
This case is significant because it has inspired changes in consumer protection contract law. Consumers will no longer have to opt into agreements that inhibit their ability to engage in meaningful legal battles against large companies. Many American corporations follow suit with AmEx in that they require customers to refrain from class action lawsuits. These class action provisions allow companies to control any and every situation without having to worry about the fact that one small instance of danger or negligence could be compounded into a class action case.
Facebook Privacy Settlements (In re Facebook, Inc. Privacy Litig.)
Facebook was busy in 2011, having settled two class action suits within weeks of each other. In the first, a group of Facebook users accused the company of violating its own policies by sharing user data with advertisers. Facebook reached a $10 settlement with the users that allowed users to send $10 checks to the company within a six-month period. In the second case, the California users accused Facebook of violating the privacy of those who participated in the so-called "Sponsored Stories" feature, which allowed Facebook to share content that users made public on their pages. Users were not compensated for the advertisements. The judge in the case found that Facebook had violated its contractual obligations by selling the content users published on its site. According to the terms of the agreement, users were required to refrain from any and all actions against Facebook "in any proceeding," thus preventing users from filing a class action suit against Facebook. The judge said that allowing such a clause to stand would violate public policy and encouraged consumers to look at small print and to be familiar with their legal rights.