Have a subscription you can't seem to cancel? The CFPB has your back

Photo (c) Grady Reese - Getty Images

If you get transferred to the 'customer retention team,' be wary of the hugs

This is a pretty easy bet: 99 out of every 100 people who read this article have a subscription of some sort -- Netflix, Amazon Prime, Adobe Creative Cloud, and the list goes on and on.

And it’s good business for subscription companies, too. Once they sign someone up, the cha-chings are there every month until a subscriber remembers they’re paying for something they’re not using or doesn’t have value anymore. And if someone cancels a subscription, there's enough of a churn to keep their bean counters busy.

However, the Consumer Financial Protection Bureau (CFPB) thinks that some subscription services – specifically those offering “negative option” subscription services where they automatically renew unless the consumer affirmatively cancels, or trial marketing programs that charge a reduced fee for an initial period and then automatically begin charging a higher fee – have gone too far. The agency wants consumers to know the tricks used by companies to confuse and deceive consumers enrolled in subscription services.

“Consumers shouldn’t have to jump through hoops to cancel subscriptions they don’t want, and they shouldn’t have to worry about a trial marketing offer turning into an unwanted monthly charge,” said CFPB Director Rohit Chopra. “The CFPB has made it clear that misleading consumers about products or subscription services they don’t want is not only dishonest but also a violation of the law.”

It started with Transunion

The straw that broke the subscription game’s back was when the CFPB took action against Transunion for repeatedly breaking the law by allegedly violating a CFPB consent order and for deceptive marketing when selling credit scores, reports, and credit monitoring products. 

“I got on the Transunion website to access my free credit report. But because of their deceptive website, I ended up signing up for a subscription that costs $25 a month without realizing it,” wrote Janissa from Wayan, Idaho, in a review submitted to ConsumerAffairs.

Once it had Transunion in its grasp, the CFPB sued ACTIVE Network for allegedly tricking consumers into enrolling in a costly membership club through the use of digital dark patterns. The CFPB has also entered into consent orders with numerous credit card issuers for allegedly deceptively marketing optional “add-on” products that charged recurring fees until consumers affirmatively canceled. 

Watch out for this

The agency says that consumers need to stay vigilant of three things that a subscription service might be trying to sneak into their deal:

A failure to disclose: “Companies likely violate the law if they misrepresent or fail to disclose information likely to inform a consumer’s decision about whether to enroll in a negative option service, including the amount of all charges and the fact that charges will continue unless the consumer takes affirmative steps to cancel,” the agency said.

Failing to obtain the consumer’s informed consent: There’s a small bit of responsibility on the consumer’s end to make sure they read all that’s required in signing up for a subscription, but by and large, the CFPB is telling companies they need to ensure that consumers genuinely agree to the terms of a negative option program. 

“The CFPB has found or alleged that companies engaged in unfair, deceptive, and abusive acts and practices when companies misrepresented or failed to disclose that they were offering negative option programs, which resulted in consumers not understanding that they were enrolling in services with recurring charges.” Again, painfully poring through that fine print could save you money and headaches.

Misleading or impeding consumers wishing to cancel: The CFPB says that it’s fairly common for bad actors to make consumers jump through complicated hoops to cancel subscription products or services, such as being forced to talk to customer service agents repeatedly, or for unreasonably long times, before granting a request to cancel.

One quick insight in dealing with a subscription cancellation -- many companies will go to the mat to try and save a subscription. If a customer service representative says they’re transferring you to the company’s “customer retention team,” beware. The love you’re given isn’t there to make you feel good as much as it is for the company to keep your little revenue stream flowing to its bank account.

If you have a subscription problem…

…don’t give up. Try canceling the subscription the right way: call the company and ask for the subscription to be canceled. Ask when, too. Most don’t want to mess with the CFPB, but if you get any hassles, the CFPB has other options you can try and are available here.

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