Consumer Federation of California

So-Called “Click to Cancel” bill and two measures on foreclosure reform and predatory loans highlighted by Assemblymember and law enforcement

For Immediate Release: September 6, 2024

SACRAMENTO, CA – The Consumer Federation of California (CFC) and Assemblymember Pilar Schiavo (D-Chatsworth) were joined Thursday in Santa Clarita by law enforcement and the son of a predatory loan victim in urging Governor Newsom to sign three bills enhancing consumer protections.

The three bills are highlighted by Assemblymember Schiavo’s “click to cancel/call to cancel” bill, AB 2863, which would enact strong rules to protect consumers in the face of an avalanche of automatic subscriptions that all too frequently make it virtually impossible to cancel. Schiavo’s bill largely mirrors a pending rule proposed by the Federal Trade Commission (FTC). CFC Executive Director Robert Herrell read from a letter sent by the FTC to Governor Newsom talking about the bill.

Two other bills focus on cracking down on predatory lending schemes for folks at risk of losing their home, and enhancing pro-consumer rules so that foreclosed homeowners are able to to still get the equity in their home. Those two bills are AB 2424, also by Schiavo, and AB 3108 by Assemblymember Reginald Jones-Sawyer (D-Los Angeles).

“CFC urges Governor Newsom to sign these important bills that protect consumers,” stated CFC Executive Director Robert Herrell. “We thank Assemblymember Schiavo for her leadership in authoring two of the bills and we also want to acknowledge Assemblymember Jones-Sawyer, whose authorship of his bill was intensely personal, as his mother was a victim of a predatory lending scheme. These bills let consumers easily cancel their unwanted subscriptions and also keep more consumers in their homes and crack down on those who try to scam our most vulnerable out of their homes.”

“These bills are about protecting the pocketbooks of everyday Californians,” said Assemblywoman Pilar Schiavo. “With our ‘Click to Cancel’ bill, we’re leading the nation by being the first state to require straightforward and accessible cancellation options, putting an end to deceptive subscription traps. This first-in-the-nation legislation ensures that consumers can easily manage their finances without falling victim to unfair charges. Coupled with our efforts to protect homeowners from predatory foreclosure practices, we’re taking significant steps to shield Californians from financial exploitation.”

All three of the bills received bipartisan support in the Legislature, which shows that these foundational consumer protection issues don’t have to be partisan. When discussing the “click to cancel/call to cancel bill Herrell added that “Consumers have had it with rampant automatic subscriptions where it is close to impossible to put a stop to something a consumer no longer wants. It should be as simple to get out of a subscription as it is to get into one. This is a common-sense approach.”

Consumers are increasingly frustrated with the complex processes necessary to cancel their unwanted subscriptions. A recent New York Times article also spotlighted problematic renewal practices by some streaming services, which fail to remind consumers of upcoming renewals. Such tactics burden consumers financially, especially as many streaming services are increasing their prices, and misleads consumers into an expense they may not be prepared for.

Recent issues underscore the need for legislation. In 2023 the FTC took action against Amazon for enrolling consumers in Amazon Prime without their consent and then deliberately making it difficult for them to cancel. Earlier this year the FTC sued Adobe for alleged deceptive practices such as hidden termination fees and unnecessarily complex cancellation processes. For example, consumers who believed they had canceled their subscriptions discovered that Adobe continued to charge them.

Regarding the two foreclosure bills, AB 2424 by Schiavo sets a minimum bid standard for foreclosures, so that foreclosure bid rigging, rampant in the industry, is minimized. The bill also enhances opportunities for consumers to stay in their home and avoid foreclosure. Jones-Sawyer’s bill, AB 3108, clarifies current law so that more district attorneys can go after predatory loan brokering when they see it. The bill also enhances consumer protection in the area.

The bills are supported by a wide range of consumer organizations and law enforcement groups, including many California District Attorneys’ offices.

The Governor has until the end of September to sign or veto the three bills.

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