A new bill was introduced on Wednesday which is meant to make it easier for people to easily cancel online subscriptions after a free trial period has ended. The bill was introduced by Senators Brian Schatz (D-HI), John Thune (R-SD), Raphael Warnock (D-GA), and John Kennedy (R-LA) say the Unsubscribe Act would require companies to be more transparent about their subscriptions.
“The subscription-based business model is exploding, and it’s largely because of the deceptive practices that some companies use to lure and trap in customers,” Schatz said in a statement. “When people sign up for a free trial, they shouldn’t have to jump through hoops just to cancel their subscription before being charged.”
The bill is meant to address what is known as “negative billing” where a customer sign up for a premium service but starts via a free trial and the company switches them to a full-price subscription automatically when the trial ends.
In their attempts to be transparent, many customers are often notified whenever their free trial period is over until the company charges them.
Other companies allow prospective customers to sign up for a service online, but then require them to call a customer service phone line to cancel. And as someone who wants to support my fellow news sites and newspapers, it’s just not nice to let me easily sign up online for $1.99 but force me to call a customer service line after you’ve already charged me for a year’s subscription that I may not have wanted (maybe I did, but I would like the option to choose).
With the Unsubscribe Act, sellers will be required to allow their customers to cancel their subscription before they’re billed. Also sellers will be required to provide notice when a free or reduced-price trials is about to end as well as requiring sellers to provide clear understanding of the terms of the contract.
And sellers wouldn’t be able to automatically transfer a free trial customer to a contract longer than one month.
Some similar was introduced in the state of California back in 2018 which requires companies to allow customers to cancel a subscription online.
Companion legislation to the Unsubscribe Act is being introduced in the House, according to a news release.