Unsubscribe With Ease: New Law Streamlines Subscription Cancellations
We’ve all done it: signed up for a streaming media service just to binge-watch one or two shows, planning to cancel after catching up. The sign-up is simple – in just a few clicks, you’re settled in on the couch with your favorite snack, ready for an epic weekend watch session. But once the credits have rolled on the season finale and you’re ready to ditch the subscription, things get tricky. While it’s all too easy to start or upgrade a subscription, online cancellations aren’t always available. Service providers often make it difficult to cancel, forcing users to deal with complex menus and phone trees and long wait times for agents. Many consumers resent racking up unwanted charges while they attempt to navigate complex cancellation processes.
The Motley Fool Ascent’s 2024 Subscription survey of 2,000 American adults found that 40% believe they’re subscribed to too many services and 57% believe they’re overpaying for their subscriptions. So why don’t people just unsubscribe? All too often, the process is complicated and customers struggle to find out how, exactly, to cancel an account. Users get distracted when they can’t find answers online quickly or learn that they have to make a phone call. They decide to come back to cancel later, and then… another month has passed and more charges have accrued.
California, one of the states leading the consumer protection charge, recognized how difficult the cancelation process is on consumers. California is strengthening its consumer protection laws again, this time targeting those pesky automatic renewals that often lead to unwanted charges. Assembly Bill No. 2863, recently signed into law, will amend the existing Automatic Renewal Law (ARL) to make online cancellations easier and more transparent for consumers.
Problems and solutions for consumers
Here’s a short breakdown of the key changes the new amendment poses and how they’ll affect consumers:
- “Click-to-cancel” mandate:
The problem: Currently, canceling online subscriptions can be a real hassle. Companies often bury cancellation buttons in hard-to-find places or require you to jump through hoops like calling customer service during limited hours.
The solution: AB 2863 mandates that companies provide a clear and conspicuous “click-to-cancel” option online. This means if you signed up online, you should be able to cancel the same way, with minimal effort.
- Clearer consent for automatic renewals:
The problem: Often, consumers unknowingly agree to automatic renewals because the terms are hidden in lengthy agreements or pre-checked boxes.
The solution: The new law requires businesses to obtain your *affirmative consent* for automatic renewals. This means you must actively agree to the terms, separate from any other part of the contract. No more sneaky pre-checked boxes!
- Upfront information about costs:
The problem: Sometimes, it’s unclear how much you’ll be charged and at what intervals when you sign up for a subscription with automatic renewal.
The solution: AB 2863 requires businesses to clearly disclose the amount or range of costs you’ll be charged and the frequency of those charges. This will help you make informed decisions about your subscriptions.
- Improved telephone cancellation:
The problem: Even when companies offer telephone cancellation, long wait times and unhelpful customer service can make it difficult to cancel.
The solution: The law requires businesses to answer cancellation calls promptly during normal business hours and to ensure the process is straightforward and efficient.
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A Win for Consumers
In essence, AB 2863 aims to make the process of managing your online subscriptions more user-friendly and transparent. By simplifying cancellations and requiring clearer disclosures, the law puts more control back into the hands of consumers. The law also specifies that the terms of the continuous subscription or automatic renewal must be presented in “clear and conspicuous” language, and explicitly defines the terms:
Clear and conspicuous or clearly and conspicuously means in larger type than the surrounding text, or in contrasting type, font, or color to the surrounding text of the same size, or set off from the surrounding text of the same size by symbols or other marks, in a manner that clearly calls attention to the language. In the case of an audio disclosure, clear and conspicuous and clearly and conspicuously means in a volume and cadence sufficient to be readily audible and understandable.
This language is similar to other consumer protection laws, including California’s privacy laws, showing a marked shift toward ensuring that consumers can easily understand their rights in a complicated and digitized world.
The federal government is also looking at ways to help increase transparency to consumers. In June, the Justice Department filed suit against Adobe, alleging that the company did not properly disclose an early termination fee, which violates the Restore Online Shoppers’ Confidence Act (ROSCA). The suit also claims Adobe required subscribers to navigate a complicated cancellation process to deter them from ending unwanted services.
How organizations can proactively prepare
California businesses offering subscription services have until July 1, 2025, to comply with the new requirements. This means updating websites, apps, and customer service protocols to ensure:
- Easy online cancellation: A clear and conspicuous “click-to-cancel” option must be provided for any subscriptions initiated online.
- Express consent for renewals: Consumers must actively agree to automatic renewals, with no pre-checked boxes.
- Transparent disclosures: Renewal costs and frequency must be clearly presented before consent.
By taking action now, businesses can help ensure a smooth transition and avoid potential penalties. But it’s important to remember that compliance hinges on more than just software and web functionality — there’s an operational readiness element at play as well. In addition to testing unsubscribe buttons and making sure backend processes work correctly, companies that require manual intervention from a customer service representative must ensure timely responses. For example, organizations must ensure they meet the law’s requirement to contact consumers who request cancellation by phone within one business day. Testing UX to ensure consumers find cancellation intuitive will be essential as well.
While functional testing will be essential to ensure compliance with the new law, forward-thinking organizations will go a step further. As they rethink and redesign cancellation flows, they have an opportunity to collect feedback that can help streamline the customer journey. Creating a better UX may help leave the door open for customers who plan to resubscribe later.
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