Introduction
In the era of subscription-based business models, many consumers have encountered the frustrating experience of trying to cancel a recurring subscription only to find themselves trapped in a maze of hidden links, confusing interfaces, and unavailable customer service representatives. These deceptive cancellation practices have become so widespread that they've sparked numerous class action lawsuits against companies that intentionally make it difficult for consumers to stop paying for services they no longer wish to use.
This article examines the growing trend of subscription cancellation class actions, the predatory practices they target, and what consumers need to know about their rights when companies make it unreasonably difficult to cancel recurring payments.
Subscription Dark Patterns
"Dark patterns" is the term used to describe user interface design choices that manipulate or trick users into making decisions they might not otherwise make. In the context of subscription cancellations, these dark patterns include:
- Hidden cancellation options: Burying cancellation links deep within website navigation or making them difficult to find in app settings.
- Forced phone calls: Requiring customers to call during limited hours rather than allowing online cancellation, creating additional barriers.
- Cancellation gauntlets: Forcing users through multiple screens of offers, discounts, and guilt-inducing messages before allowing cancellation.
- False confirmations: Misleading users into thinking they've successfully canceled when they actually haven't completed all the necessary steps.
- Data hostage situations: Threatening to delete user data if they cancel, creating fear of loss.
These tactics are designed to exploit behavioral psychology, capitalizing on consumer fatigue and confusion to maintain recurring revenue streams at the expense of transparency and ethical business practices.
Recent Subscription Cancellation Settlements
Several major companies have faced class action lawsuits over deceptive subscription cancellation practices:
- Streaming services: Multiple streaming platforms have settled claims alleging they deliberately made cancellation difficult while promoting easy sign-up processes.
- Fitness chains: Several national gym chains have faced litigation over requiring in-person visits or certified mail for cancellations, even during pandemic lockdowns.
- Digital news outlets: News websites have settled claims regarding hidden cancellation procedures and continued charging after cancellation requests.
- Food delivery services: Meal kit and food delivery companies have faced lawsuits over making cancellation instructions obscure while prominently displaying pause options.
- Software companies: Several software providers have settled claims related to automatic renewals without clear notice and difficult cancellation processes.
These settlements often require companies to provide clearer cancellation options, offer refunds to affected consumers, and change their business practices to ensure easier subscription management.
Legal Regulations and Requirements
Several laws govern subscription cancellation practices, though enforcement varies:
- Restore Online Shoppers' Confidence Act (ROSCA): Federal law requiring clear disclosure of terms and "simple mechanisms" for cancellation.
- California Automatic Renewal Law: One of the strictest in the U.S., requiring easy-to-find cancellation instructions and online cancellation options for services purchased online.
- Electronic Fund Transfer Act: Governs how companies can process recurring payments and your right to stop them.
- State automatic renewal laws: Many states have enacted their own regulations addressing subscription cancellation practices.
These laws increasingly require that cancellation methods be as easy and accessible as the methods used to sign up for the service in the first place—a "symmetry requirement" that aims to prevent the common practice of making sign-up simple while making cancellation difficult.
Consumer Rights and Protections
Consumers have several rights regarding subscription cancellations, though many are unaware of them:
- Right to clear information: Companies must clearly disclose subscription terms before obtaining payment information.
- Right to cancel: Consumers have the legal right to cancel recurring subscriptions, regardless of company-imposed restrictions.
- Right to stop payment: If unable to cancel directly with the company, consumers can instruct their bank or credit card company to stop recurring charges.
- Right to dispute: Charges that continue after cancellation can be disputed through credit card chargeback processes.
Despite these protections, companies often count on consumers being unaware of their rights or being too busy to pursue them when obstacles are placed in their way.
How Consumers Can Fight Back
If you encounter deceptive subscription cancellation practices, consider these actions:
- Document everything: Save screenshots of cancellation attempts, record customer service calls (where legal), and keep confirmation emails.
- Use multiple channels: If online cancellation is difficult, try email, phone, and even certified mail to create a paper trail.
- Contact your financial institution: Banks and credit card companies can often block future charges if you've attempted to cancel with the merchant.
- File complaints: Report deceptive practices to the FTC, CFPB, and your state's attorney general office.
- Join class actions: If you learn of a class action against a company that made cancellation difficult, you may be eligible to join as a class member.
By taking these steps, you not only protect yourself but also contribute to the broader push for more transparent business practices.
Conclusion
Subscription cancellation class actions represent an important consumer protection tool against companies that intentionally create obstacles to ending unwanted services. As subscription-based business models continue to proliferate across industries, the pressure from these lawsuits has begun to force positive changes in how companies approach the cancellation process.
Consumers should remain vigilant about their rights, carefully review terms before signing up for subscriptions, and be prepared to advocate for themselves when companies make cancellation unnecessarily difficult. By understanding the common tactics and knowing your legal rights, you can better protect yourself from predatory subscription practices.