Consumer Federation of California

CFC-sponsored bill would lead nation and closely resembles proposal by Biden-Harris administration proposal at Federal Trade Commission

FOR IMMEDIATE RELEASE: August 29, 2024

SACRAMENTO, CA – Legislation sponsored by the Consumer Federation of California (CFC) proposing strong rules allowing consumers to easily “click to cancel” or “call to cancel” their automatic subscriptions passed the Legislature with broad, bipartisan support and is now headed to Governor Newsom. 

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 Assembly by a vote of 75-0 after passing the state Senate by a vote of 36-1. 

“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,” said CFC Executive Director Robert Herrell. “It should be as simple to get out of a subscription as it is to get into one. This common-sense approach is the heart of our click-to-cancel bill and we urge Governor Newsom to sign this bill empowering consumers.”

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. 

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 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.

The bill is supported by a 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 bill.

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Tags: Adobe, Automatic Subscriptions, California Legislation, Federal Trade Commission, FTC