A new law in California will make it easier for consumers to cancel their streaming subscriptions and similar products when they enroll in automatic renewal of those services.
The law, passed through Assembly Bill (AB) 2863, will require companies that offer automatic subscription renewals through one-click purchases to also offer customers a way to cancel their subscriptions through the same one-click method.
California already had one of the toughest subscription cancellation laws in the country, requiring companies to offer a way to cancel a recurring subscription through the Internet if they allowed customers to sign up for a service that way.
The initial law was meant to prevent companies from allowing customers to purchase a subscription through the web, while forcing them to call a hotline to cancel them. Consumer advocacy groups complained that companies would often subject customers to frustrating long wait times on the phone with the hope that they would eventually hang up without cancelling their service.
While the law was good in theory, it contained at least one loophole: Companies were in compliance as long as they offered a way for customers to cancel their subscriptions online, but could make them click several links or visit several webpages with opt-in requirements before a cancellation request was processed.
Soon, companies will have to offer easier, one-click cancellation methods if they allow customers to purchase a subscription using a one-click technique. The new law takes effect on January 1, 2025, and would cover purchases and contracts entered into from the following July.
The bill’s co-author, Assembly Member Pilar Schiavo, said the goal of AB 2863 was to help Californians save money at a time when subscription costs were adding up.
“California is setting a model for the nation on protecting consumers from unnecessary charges, giving them more control over their finances and helping to ensure fair business practices, providing a win for both consumers and small businesses,” Schiavo said on Tuesday. “I’m grateful that this important legislation was signed, as it will mean more money in the pockets of people throughout our community.”
The measure will have a significant impact on companies with digital products that allow customers to purchase subscription-based services using one-click tools. Companies like Roku, Amazon and Apple already allow users of their streaming hardware to purchase and cancel subscription using one-click techniques.
Some digital newspaper outlets, fitness clubs, software developers and other services allow customers to purchase subscriptions through a one-click button, but still require filling out a form or navigating through several web pages before they process a cancellation.
Those days are about to come to an end, warned the Consumer Federation of California (CFC), an advocacy group that backed the proposal.
“Consumers have had it with pocketbook-sucking subscriptions where it is almost impossible to cancel,” Robert Herrell, the Executive Director of CFC, said on Tuesday. “It should be as simple to get out of a subscription as it is to get into one. This is simple common-sense and California now has the most comprehensive law in the nation on this topic. From software subscriptions to gym memberships to a wine club, consumers should have easy control of their subscriptions.”
