Consumer Federation of California

CFC-sponsored bill most comprehensive in nation, closely resembles proposed federal rule; other pro-consumer CFC bills signed also

For Immediate Release: September 24, 2024

SACRAMENTO, CA – Consumer Federation of California (CFC)-sponsored legislation proposing strong rules allowing consumers to easily ‘click or call to cancel’ their automatic subscriptions was signed today by Governor Newsom along with other CFC-sponsored or co-sponsored consumer protection bills. 

The bill, Assembly Bill 2863, is authored by Assemblymember Pilar Schiavo (D-Chatsworth) and is similar to a pending Federal Trade Commission (FTC) proposed rule relating to automatic subscriptions and subscription renewals. The bill passed the Legislature by broad bipartisan support after being opposed much of the year by numerous big business groups. 

“We’d like to thank Governor Newsom for signing this bill and affirming the hard work by Assemblymember Schiavo and our CFC-led consumer coalition to put this bill on his desk,” said CFC Executive Director Robert Herrell. “Consumers have had it with pocketbook-sucking subscriptions where it is almost impossible to cancel. It should be as simple to get out of a subscription as it is to get into one. This is simple common-sense and California now has the most comprehensive law in the nation on this topic. From software subscriptions to gym memberships to a wine club, consumers should have easy control of their subscriptions and ”

Assemblymember Schiavo stated “At a time when too many in our community are struggling, unwanted subscription renewals can really add up. AB 2863 is the most comprehensive “Click to Cancel” legislation in the nation, ensuring Californians can  cancel unwanted automatic subscription renewals just as easily as they signed up – with just a click or two. California is setting a model for the nation on protecting consumers from unnecessary charges – giving them more control over their finances and helping to ensure fair business practices, providing a win for both consumers and small businesses. I’m grateful that this important legislation was signed, as it will mean more money in the pockets of people throughout our community.” 

Consumers are increasingly frustrated with the complex processes necessary to cancel their unwanted subscriptions. A New York Times article spotlighted problematic renewal practices by some streaming services, which fail to remind consumers of upcoming renewals. Such tactics burden consumers financially while putting consumers into a Kafkaesque maze they feel they can never escape from to complete a simple task.

The new “click/call to cancel” law closely resembles a federal rule proposed by the Federal Trade Commission (FTC). FTC Chair Lina Khan told CBS News correspondent Lesley Stahl during an interview broadcast on 60 Minutes Sunday, September 22nd that “often companies will make it easy to sign up but then when you try to cancel you have to go in person, you have to phone up but there’s nobody there to pick up the call or if there is they endlessly transfer you to somebody else if you get a real person…or you have to navigate to 17 different screens and squint to see if you can even see the fine print…” Khan added that such corporate tactics such as these and junk fees on consumers “don’t make the market more fair and honest.” 

Key provisions of AB 2863 include:

• Click-to-Cancel Process: The bill introduces a simplified “click-to-cancel” process.
• Transparency and Consent: The bill mandates that consumers give their express affirmative consent before being enrolled in subscription services and requires annual reminders and notifications about changes in subscriptions.

Recent issues underscored the need for stronger law in this area. 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 theFTC 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.

The new law was supported by a range of consumer organizations and law enforcement groups, including many California District Attorneys’ offices. The ‘click/call to cancel’ law will take effect on July 1, 2025.

About the Consumer Federation of California: The Consumer Federation of California is a nonprofit advocacy organization that, since 1960, has been a powerful voice for consumer rights. CFC campaigns for laws and regulations that place consumer protection ahead of corporate profit, either in front of the California Legislature or before state agencies in support of consumer regulations.

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