There were many exciting parts of your new car — the heated seats, a shiny new navigation system, three free months of satellite radio. Three months and one day later, the radio kept playing. You barely noticed. A year later, SiriusXM still pockets your $21.99 every month. Though you signed up with one tap, cancelling requires calling a live agent who treats every ‘”no” as an invitation to sell you a reason to stay. Oh, and those heated seats? Those might demand a subscription, too.
On Oct. 1, New York City’s new “Click to Cancel” rule takes effect, empowering New Yorkers to fight back against these subscription traps. Companies will be required to provide a simple, accessible way to cancel a subscription through the same method used to sign up — making canceling as easy as signing up. Tactics designed to delay or obstruct cancellation will be banned. “Click to Cancel” could save New York City consumers up to $162 million and at least 600,000 hours per year.
The policy comes as automatic renewals, confusing checkout processes, and cancellation mazes have become fixtures of the consumer experience. From SiriusXM to gym memberships to streaming services, automatic rollovers are ensnaring consumers into subscriptions all across the economy.
To sign up for that nifty free trial, you must first fork over your payment information. And with a one-click checkout, you’ve sped past the fine print that promises to roll you into a paid subscription at the end of the trial.
Companies are betting that you’ll forget to cancel before the trial ends — and keep forgetting for months or even years, allowing companies to cash in while family budgets take a hit. Families could save north of $1 billion over a decade by eliminating these “free trial losses.”
Automatic rollovers are just one of a panoply of “dark patterns,” or sneaky online design tricks engineered to coax you into coughing up personal data, spending more, or signing up for things you don’t need.
A company might lure you in with a too-good-to-be-true deal that they never intend to honor. Instacart, for example, advertised “free delivery” for a shopper’s first order — then simply renamed the “delivery fee,” tacking on a mandatory “service fee” for delivery orders.
Or companies might slip something into your basket, hoping you click purchase before noticing. The 2020 Trump campaign famously used this tactic to sign one-time donors up for recurring monthly contributions, contributing to more than $64 million in refunds.
Once you’re in, companies have developed an extensive playbook for ensuring you never leave. They make you run a digital obstacle course to find the “cancel” button, including extra steps, in-person cancellation requirements, buried instructions, and relentless retention offers. Uber allegedly forced customers to jump through 32 hoops across 23 screens just to cancel their loyalty subscription. As one judge put it in reference to SiriusXM’s subscription maze, these obstacles are “an unreasonable delay built to keep you paying.”
If the obstacle course doesn’t wear you down, some companies charge you extra just to leave. Adobe, for example, buried a steep early-termination fee in the fine print of its subscriptions.
Companies have turned efforts to sign up — and maddening cancellations — into a booming business, one supercharged by the pandemic, when millions of customers shifted their shopping online. Rules like New York City’s — and ideally, a future federal standard like that of the now-struck-down FTC rule — can help to rebalance the scales, giving consumers back some of the power companies have leveraged technology to take away.
Owens is president and CEO of Groundwork Collaborative. She is the author of “Gouged: The End of a Fair Price, and What That Means for Your Wallet” (Viking) and the Gouged newsletter.