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Nov. 15, 2021, 10:52 a.m.

The end of “click to subscribe, call to cancel”? One of the news industry’s favorite retention tactics is illegal, FTC says

Most U.S. news organizations won’t let readers cancel online. The Federal Trade Commission wants that to change.

Discovering they had to get on the phone to cancel a subscription they signed up for online rankled several respondents in our survey looking at why people canceled their news subscriptions. The reaction to the call-to-cancel policy ranged from “an annoyance” and “ridiculous” to “shady” and “oppressive.”

Publishers tend to think of this as “retention.” A study of 526 news organizations in the United States found that only 41% make it easy for people to cancel subscriptions online, and more than half trained customer service reps in tactics to dissuade customers who call to unsubscribe.

The Federal Trade Commission, meanwhile, recently made it clear that it sees the practice as 1) one of several “dark patterns that trick or trap consumers into subscriptions” and 2) straight-up illegal. The FTC vowed to ramp up enforcement on companies that fail to provide an “easy and simple” cancellation process, including an option that’s “at least as easy” as the one to subscribe.

Translation? If you can subscribe online, you should be able to cancel your subscription online. (California was ahead of the curve on this one; the state has required news sites and other businesses allow people to cancel online since 2018.)

Scroll through those picking up on the FTC announcement and you’ll see a few repeat offenders — cancelling a Planet Fitness membership appears to be a Sisyphean task — and news organizations are among the ones catching the most flak.

The new guidelines around “negative option marketing” — which includes everything from automatic renewals to free trials that convert to paid subscriptions if consumers take no action — go beyond mandating that companies offer straightforward cancellation.

Companies, including news companies, must make “clear and conspicuous” disclosures, including “each deadline by which the consumer must act in order to stop the charges,” “the amount (or range of costs) the consumer will be charged or billed,” and “all information necessary to cancel the contract.” And customer service reps will have to keep new guidelines in mind: “In implementing effective cancellation procedures, marketers should not, among other things: hang up on consumers who call to cancel; place them on hold for an unreasonably long time; provide false information about how to cancel; or misrepresent the reasons for delays in processing consumers’ cancellation requests.” (You can read the full enforcement policy statement from the FTC here.)

Looking around, it seems some publishers think — and hope — subscribers simply won’t notice if their subscription price gets hiked. In his look at the newspaper-owning hedge fund Alden Global Capitol, McKay Coppins notes that their approach has been fairly simple: “Gut the staff, sell the real estate, jack up subscription prices, and wring as much cash as possible out of the enterprise until eventually enough readers cancel their subscriptions that the paper folds, or is reduced to a desiccated husk of its former self.”

But it’s not just hedge fund-owned publishers that have adopted the subscription practices that have caught the government’s attention. Again, most U.S. news organizations don’t give readers an easy way to cancel online. When I checked — more than a week after the FTC announced it planned to crack down on companies who don’t make it easy to cancel — The New York Times still requires me to talk to someone to unsubscribe, either by starting a live chat or by picking up the phone. (Update: The New York Times says digital news-only subscribers can now cancel via their “Account” page. If you receive a print edition or subscribe to the news product and Cooking or Games or Wirecutter, the live chat or phone call remain your only options right now.)

Photo by Alexander Andrews used under a Creative Commons license.

POSTED     Nov. 15, 2021, 10:52 a.m.
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