As many consumers know from first-hand experience, it’s often much easier to sign up for a subscription or service than it is to cancel it.
The White House says it is looking to ease that frustration, whether it involves a cable subscription, gym membership or other service, Neera Tanden, President Joe Biden’s domestic policy advisor, said in announcing new rules.
Companies frequently count on people giving up on ending a subscription or service because of the aggravations imposed upon them by companies that profit by making the process time-consuming and frustrating.
Whether it’s putting customers on hold or making them jump through other time-consuming hoops, companies often delay or otherwise make it hard to cancel so they “can hold onto your money for longer,” Tanden told reporters in a briefing on Friday.
These hassle don’t just happen by accident, administration officials contend. Companies often deliberately design their business processes to be burdensome or hard to navigate in order to deter consumers from claiming a rebate or canceling a service they no longer want, according to Tanden.
The Federal Trade Commission is expected to finalize a proposal known as “click to cancel” as early as Monday, requiring companies to make it just as easy to cancel a subscription or service as it was to sign up.
Consumer pain points
The focus on canceling services comes as several government agencies take aim at some of the most common consumer complaints.
That includes airlines, with new rules from the Department of Transportation that took effect in June requiring airlines to provide automatic refunds when flights are canceled or significantly delayed. The agency is now proposing a crackdown on junk fees such as parents having to pay more to sit next to their children when flying.
“DOT’s rule also puts an end to airline runarounds by requiring refunds to be automatic, prompt, in the original form of payment and for the full amount paid. No more jumping through hoops or getting stuckk with expiring flight credits,” according to the Biden administration.
Part of the Biden administration’s ongoing crackdown on what it calls “junk fees,” the effort is hitting some roadblocks, in the form of industry opposition and court challenges.
A federal judge in May temporarily blocked a rule capping fees on late credit-card payments at $8 a month. The ruling came in response to a suit filed against the Consumer Financial Protection Bureau by the U.S. Chamber of Commerce and the banking industry.