Cable Firms to FTC: We Shouldn’t Have to Let Users Cancel Service With a Click
Lobbyists for cable firms and advertisers yesterday expressed their displeasure with a proposed “click-to-cancel” regulation that goals to make it simpler for customers to cancel providers.
Federal Trade Commission chair Lina Khan has mentioned that adjustments are wanted as a result of “some businesses too often trick consumers into paying for subscriptions they no longer want or didn’t sign up for in the first place.” The FTC proposed the brand new algorithm in March 2023, and feedback from business teams had been taken this week in a listening to presided over by an administrative legislation decide.
NCTA – The Internet & Television Association, the first commerce group for cable firms like Comcast and Charter, mentioned the rule would make it tougher to supply offers to clients who’re making an attempt to cancel.
“The proposed simple click-to-cancel mechanism may not be so simple when such practices are involved. A consumer may easily misunderstand the consequences of canceling, and it may be imperative that they learn about better options,” NCTA CEO Michael Powell mentioned on the listening to. For instance, a buyer “may face difficulty and unintended consequences if they want to cancel only one service in the package,” as “canceling part of a discounted bundle may increase the price for remaining services.”
Powell mentioned that cable firm reps can often speak clients out of canceling. “Out of millions of cancellations, complaints received by NCTA members amount to only a tiny fraction of 1 percent,” he mentioned. “Three out of four of the cable and broadband customers who called to cancel end up retaining some or all service after speaking with an agent.”
Powell worries that retaining clients will turn into harder as a result of, he mentioned, the FTC “proposal prevents almost any communication without first obtaining a consumer’s unambiguous, affirmative consent. That could disrupt the continuity of important services, choke off helpful information, and forgo potential savings. It certainly raises First Amendment issues.”
Powell additionally mentioned the price of complying—together with retraining workers and sustaining information for longer than present follow—might pressure cable firms to boost costs. He claimed that the FTC’s estimate of compliance prices is just too low.
FTC: Sellers Must Take “No” for an Answer
The FTC mentioned certainly one of its proposed guidelines “would require businesses to make it at least as easy to cancel a subscription as it was to start it. For example, if you can sign up online, you must be able to cancel on the same website, in the same number of steps.”
Sellers would additionally need to receive buyer consent earlier than they “pitch additional offers or modifications when a consumer tries to cancel their enrollment,” the FTC mentioned. Before making these pitches, sellers must “ask consumers whether they want to hear them. In other words, a seller must take ‘no’ for an answer, and upon hearing ‘no’ must immediately implement the cancellation process.”
The FTC additionally proposes that sellers be required to “provide an annual reminder to consumers enrolled in negative option programs involving anything other than physical goods, before they are automatically renewed.”
At yesterday’s listening to, the FTC additionally heard from the Interactive Advertising Bureau (IAB), a foyer group for the internet advertising business. “The proposed rule would disrupt the current regime by adding specific requirements dictating what auto-renewal disclosures must say and how they must be presented,” mentioned Lartease Tiffith, the IAB’s govt VP for public coverage.
Tiffith argued that the rule will burden companies “and restrict innovation without any corresponding benefit. And as the technology develops, these prescriptive requirements will constrain companies from being able to adapt their offerings to the needs of their customers.”
