As a consumer, you probably subscribe to a lot of ongoing (monthly or yearly) services. If regulations required you to proactively renew them, we’d wash a lot of stupid, poor corporate behavior out of the system. Should this be the law? Let’s explore what it might mean.
What do you subscribe to?
What do you pay for on a recurring basis every month or every year? A cursory check of your credit card and bank statements might reveal the following:
- Telecom charges (for example, cable TV, internet, and mobile phone)
- Streaming video subscriptions (like HBO, Disney+, or Netflix)
- Streaming audio subscriptions like Spotify or Apple Music, or for audiobooks, Audible
- Content subscriptions like magazines and newspapers (both physical and online subscriptions)
- Credit card annual fees
- Software (for example, Microsoft Office, Adobe, or Quickbooks)
- App subscriptions, like online games
- Web services, like backup services or online storage (for example, Dropbox or Google Drive)
- Online security, such as Norton
- Insurance, including home, car, renter’s, health, dental, and phone insurance
- Retail clubs like Costco, or Amazon Prime
- Home security services like ADT
- Gym memberships
This is not a complete list, and that is the point. These services are likely spread across multiple credit cards and bank accounts. Some, you probably subscribed to through app stores like the Apple App Store or Google Play. If you have a small business, as I do, there may be even more of them.
It’s a pain to review and possibly cancel these services
It’s a pain to track down all these services. And you probably don’t want to think about them and evaluate whether they’re worth it, because you have other more pleasant things to do right now, like filing your taxes, dealing with your kid’s head lice, or going to the dentist.
So they sit in your financial accounts, renewing and sucking money away for services that you might find valuable . . . or might, on reflection have no further need for. Some were trial subscriptions you forgot to cancel. Even if you take a moment and decide “let’s get rid of this one,” you need to somehow track down where you subscribed and how to unsubscribe. And some even require you to make a phone call to cancel, which ought to be illegal (and is, in some states). My gym even required me to send a certified letter!
What if these renewals weren’t automatic?
California passed a law taking effect in July 2022 that required advance notice of automatic renewals. It requires:
- A required notice of impending renewal sent 15 to 45 days before renewal date for subscriptions with an initial term of one year or longer.
- A required notice of impending renewal sent 3 to 21 days before the end of a gift or free trial period.
- For online subscriptions, the option to cancel “immediately” online – without having to fill out a survey or jump through other hoops first.
Let’s imagine for a moment that such policies were in place nationwide.
You’d never have that “Oh, you charged me again, well, what the heck, I might as well live with it for another year.” experience.
Your subscription evaluations would take place, not when your credit card expired, but before the expense kicked in.
People would take a moment to think about what they were subscribing to, and would easily cancel things that were useless or cost more than they were worth.
Companies with subscriptions would have to regularly demonstrate the value of what they were delivering.
Competitors would offer to help you unsubscribe from competing services and replace them.
And a result, companies would invest in improving customer experience, not creating barriers to exiting their low-value services.
I’d much rather that companies invest in better value than in slimy policies based on the “convenience” of having your credit card regularly drained.
Should this be a nationwide regulation? I’d certainly be in favor of it. How about you?