House Bill Aims to Achieve Goals of FTC’s Click-to-Cancel Subscription Rule

A bill reintroduced in the U.S. House aims to protect consumers from what its sponsors called “misleading subscription plans” that trick consumers into paying monthly membership fees without their explicit consent.

The Unsubscribe Act (H.R. 7048), sponsored by Rep. Mark Takano of California and co-sponsored by Reps. Mark Amodei of Nevada, Seth Magaziner of Rhode Island and Troy Nehls of Texas, was reintroduced Jan. 13.

The bill would require that subscriptions be as easy to cancel as they are to sign up for; that companies get affirmative consent from consumers before charging them after a free or reduced-cost trial; that sellers periodically notify customers of contract changes, charges and how to cancel a subscription; and that companies be prohibited from automatically signing customers on to a contract, according to a press release issued Jan. 13 by Takano.

Takano said in the release that “corporations are cashing in [on] subscription models that rely on a consumer forgetting to cancel a free trial. Corporations haven’t put into place commonsense reforms like ending a subscription just as easily as signing up for one, so I’m proud to introduce this bipartisan legislation to put more money back in Americans’ pockets.”

The reintroduction of the Unsubscribe Act came after a federal court struck down the Federal Trade Commission’s “click-to-cancel” rule, the release said.

It was reported in July that a federal court blocked the click-to-cancel rule days before the rule would have gone into effect. The court found that the FTC failed to adhere to proper procedures under the FTC Act when making the rule.

A companion bill to the House’s Unsubscribe Act was introduced in the Senate by Sens. Brian Schatz of Hawaii and John Kennedy of Louisiana, according to Takano’s press release.

The Senate’s Unsubscribe Act (S. 2253) was introduced in July, sponsored by Schatz and co-sponsored by Kennedy.

Schatz said at the time in a press release that the subscription-based business model is exploding “largely because of the deceptive practices that some companies use to lure and trap in customers.”

“Our bill will require companies to be more transparent about their business model and make it easier for consumers to avoid costly, automatic monthly charges they never intended to make,” Schatz said.

Congress is also considering the Click to Cancel Consumer Protection Act (S. 2254), which was introduced in the Senate in July by Sen. Ruben Gallego of Arizona, and the Click to Cancel Act (H.R. 4819), which was introduced in the House in July by Rep. Brad Sherman of California.