A bipartisan group of lawmakers introduced a bill Wednesday that would make it easier for people to cancel online subscriptions after a free trial period has ended. Sens. Brian Schatz (D-HI), John Thune (R-SD), Raphael Warnock (D-GA), and John Kennedy (R-LA) say the Unsubscribe Act would require companies to be more transparent about their subscriptions.
“The subscription-based business model is exploding, and it’s largely because of the deceptive practices that some companies use to lure and trap in customers,” Schatz said in a statement. “When people sign up for a free trial, they shouldn’t have to jump through hoops just to cancel their subscription before being charged.”
The bill addresses what’s known as “negative option billing,” where a customer signs up for a free trial and the company switches them to a full-price subscription automatically when the trial ends. Customers are often not notified that the free trial period is ending until the company charges them. Other companies allow prospective customers to sign up for a service online, but then require them to call a customer service phone line to cancel. And as someone who wants to support my fellow news sites and newspapers, it’s just not nice to let me easily sign up online for $1.99 but force me to call a customer service line after you’ve already charged me for a year’s subscription that I may not have wanted (maybe I did, but I would like the option to choose).
The Unsubscribe Act would require sellers to allow customers to cancel a subscription in the same way they signed up, require sellers to provide notice when a free or reduced-price trial is about to end, and to provide customers with a clear understanding of the terms of the contract. And sellers wouldn’t be able to automatically transfer a free trial customer to a contract longer than one month.
California has had a law in place since 2018 that requires companies to allow customers to cancel a subscription online.
Companion legislation to the Unsubscribe Act is being introduced in the House, according to a news release.