Schiavo Introduces Click to Cancel Bill to Protect Consumers

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By Yosi Yahoudai
Founder and Managing Partner

SACRAMENTO – Assemblywoman Pilar Schiavo announced the introduction of AB 2863 today, a bill aimed at protecting consumers and putting more money back in people’s pockets by simplifying the cancellation process for subscription services.

This legislation aligns with similar Federal Trade Commission (FTC) initiatives by consumers with a “Click to Cancel” option for subscriptions, ensuring the process to unsubscribe is as easy and accessible as signing up.

“The subscription economy makes their money on the backs of consumers, using deceptive practices that cause people to spend more money than they want to. Especially at a time when families are struggling just to get by, things like monthly subscriptions can really add up. This bill will protect people’s pocketbooks from these manipulative subscription models,” said Assemblywoman Schiavo. “The subscription economy is on track to reach a $1.5 trillion market by 2025, so now is the time to ensure that consumers are protected.”

2022 research showcased that an average of 42% of consumers continue to pay for subscriptions they no longer utilize, costing them approximately $133 more each month. These practices often go unannounced, as companies fail to remind consumers of upcoming renewals, leveraging forgetfulness to boost profits.

“In a world where subscription services too often trap consumers in a maze of renewal processes, AB 2863 puts power back with consumers, where it belongs,” said Robert Herrell, Executive Director of the Consumer Federation of California (CFC) . “CFC is sponsoring AB 2863 because consumers deserve transparent, understandable subscription choices and an easy cancellation process, much like what the FTC is proposing. This bill keeps consumers from unwanted subscriptions and bureaucratic frustration.”

Assemblywoman Schiavo continued, “AB 2863 will help people keep the approximately $133 they spend each month on subscriptions they don’t use, giving them much needed money for everyday expenses that are already so challenging to afford.”

The bill will begin moving through the California State Assembly later this month.

Click to Cancel Bill Would:

This bill would require the ability to cancel or terminate to be available in the same medium that the consumer used in the transaction that resulted in the activation of the automatic renewal or continuous service, as specified. The bill would require a mechanism for cancellation by toll-free telephone number to, among other things, be answered promptly during normal business hours, as defined, and not obstruct the ability to cancel the service or feature.

This bill would additionally require, in the case of the business increasing the fee, including increases the consumer affirmatively consented to in an existing plan or arrangement, the business to provide a clear and conspicuous notice of the fee increase and information regarding how to cancel in a specified manner no less than 45 days before the fee increase takes effect.

This bill would also require the business to provide the notice to the consumer before obtaining the consumer’s billing information. The bill would also require the notice to include the amount or range of costs the consumer will be charged and, if applicable, the frequency of those charges a consumer will incur unless the consumer takes timely steps to prevent or stop those charges.

Other Bills Recently Introduced by Schiavo:

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About the Author
Yosi Yahoudai is a founder and the managing partner of J&Y. His practice is comprised primarily of cases involving automobile and motorcycle accidents, but he also represents people in premises liability lawsuits, including suits alleging dangerous conditions of public property, third-party criminal conduct, and intentional torts. He also has expertise in cases involving product defects, dog bites, elder abuse, and sexual assault. He earned his Bachelor of Arts from the University of California and is admitted to practice in all California State Courts, and the United States District Court for the Southern District of California. If you have any questions about this article, you can contact Yosi by clicking here.