Click-to-cancel: Difference between revisions

The "Click to Cancel" rule is not limited to online services, as the name might suggest. It includes, but is not limited to "Interactive Electronic Media, telephone, print, and in-person transactions"<ref>https://www.federalregister.gov/documents/2024/11/15/2024-25534/negative-option-rule#sectno-citation-425.1</ref>. The cancellation mechanism must be "at least as simple as consent"<ref>https://www.federalregister.gov/d/2024-25534/p-1164</ref>. The customer may not be required to interact with a representative, whether a real human or a chat bot, if the customer was not required to do so when they signed up for the service<ref>https://www.federalregister.gov/d/2024-25534/p-1166</ref>. For services which were signed up for in-person, the seller must allow cancellation online or over the phone<ref>https://www.federalregister.gov/d/2024-25534/p-1168</ref>.  

Gym memberships are a notorious example of being significantly more difficult to cancel than they were to sign up for. While some states, such as California<ref>https://leginfo.legislature.ca.gov/faces/billCompareClient.xhtml?bill_id=202320240AB2863&showamends=false</ref> already had laws analogous to CtC, gym locations outside of those locations have continued to make it easy to sign up, yet difficult to cancel.

Prior to state-level laws, their FAQ stated that "You can fill out a cancellation form at the front desk of your home club, or send a letter (preferably via certified mail) to your club requesting cancellation. Memberships can’t, unfortunately, be cancelled by email or phone"<ref>https://www.planetfitness.com/about-planet-fitness/customer-service/membership-faqs</ref> despite allowing online signups. As of Jan 18, 2025, their terms state "our cancellation process may vary from club to club", and that "Some members may also be eligible to cancel their membership online based on their membership type and the location of their home club"<ref>https://archive.ph/XSG0Q</ref>.  

In a similar vein, LA Fitness's current policy states that "via your online account or as may otherwise be provided in your agreement (for example, depending on your state of enrollment, you may be able to cancel by email)", but previously stated that they "recommend you mail the notice by certified mail and keep a record for your files. Or, you can deliver the notice directly to the Operations Manager at the nearest LA Fitness facility between 9AM and 5PM on Monday through Friday" <ref>https://web.archive.org/web/20210616083544/https://lafitness.com/Pages/MembershipQuestions.aspx#</ref>.

"Free-to-Pay" is a technical term for a free trial<ref>https://www.ftc.gov/system/files/documents/public_statements/1598063/negative_option_policy_statement-10-22-2021-tobureau.pdf</ref>. In many cases, rather than providing a free trial with no strings attached, and then billing the customer if they decide to sign up, the vendor collects payment information as a prerequisite of the free trial, and automatically bills the customer if they fail to affirmatively cancel the trial.

While it does not outright prohibit this practice, the click-to-cancel rule partially alleviates these issues by requiring clear disclosures and consent. According to state AGs, 'advertisements for free-to-pay conversion offers often lure consumers by promising a “free” benefit while failing to clearly and conspicuously disclose future payment obligations'<ref>https://www.federalregister.gov/d/2023-07035/p-83</ref>. The FTC also states that<ref>https://www.federalregister.gov/d/2023-07035/p-87</ref>:<blockquote>Other studies reveal similar trends. TINA noted the FBI's internet Crime Complaint Center recorded a rise in complaints about free trial offers, growing from 1,738 in 2015 to 2,486 in 2017, with losses totaling more than $15 million. Similarly, a 2019 Bankrate.com survey cited by NCL found that 59% of consumers have signed up for “free trials” that automatically converted into a recurring payment obligation “against their will.” In NCL's view, these data point to “a troubling, and costly problem for American consumers.” </blockquote>

[[Adobe]] allegedly "trapped customers into year-long subscriptions through hidden early termination fees and numerous cancellation hurdles", according to the FTC<ref>https://www.ftc.gov/news-events/news/press-releases/2024/06/ftc-takes-action-against-adobe-executives-hiding-fees-preventing-consumers-easily-cancelling</ref>. Some of their plans are confusing "annual paid monthly" plans, in which the customer receives a discount as if they had signed up for an annual subscription, but are billed monthly. The FTC alleges that they did not prominently disclose the early termination fee associated with these plans, which is half of the remaining monthly payments if the consumer cancels before the annual subscription runs its course. The complaint also alleges that the cancellation process is difficult and costly:<blockquote>In addition to failing to disclose the ETF to consumers when they subscribe, the complaint also alleges that Adobe uses the ETF to ambush consumers to deter them from cancelling their subscriptions. The complaint also alleges that Adobe’s cancellation processes are designed to make cancellation difficult for consumers. When consumers have attempted to cancel their subscription on the company’s website, they have been forced to navigate numerous pages in order to cancel.When consumers reach out to Adobe’s customer service to cancel, they encounter resistance and delay from Adobe representatives. Consumers also experience other obstacles, such as dropped calls and chats, and multiple transfers. Some consumers who thought they had successfully cancelled their subscription reported that the company continued to charge them until discovering the charges on their credit card statements.</blockquote>

Brigit is a cash advance app. The FTC complaint alleges that the company "used manipulative design tricks to create a confusing and misleading cancellation process that made it difficult for consumers to cancel their subscriptions<ref>https://www.ftc.gov/news-events/news/press-releases/2024/11/ftc-sends-more-17-million-consumers-harmed-brigits-deceptive-claims-junk-fees-confusing-cancellation</ref>."  

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