Cable companies fight to keep it hard for consumers to press cancel

Last year, the Federal Trade Commission proposed a policy called “Click to Cancel” that would make it easier for consumers to cancel their subscriptions to services. Now, cable companies are fighting back against the proposed rule, arguing that the policy could make a consumer “easily misunderstand the consequences of cancelling.”

The FTC’s “Click to Cancel” proposal was first introduced in March after the government agency received multiple complaints from consumers about the trouble they were having cancelling subscriptions for services.

“Some businesses too often trick consumers into paying for subscriptions they no longer want or didn’t sign up for in the first place,” said FTC Chair Lina M. Khan in a press release. “The proposed rule would require that companies make it as easy to cancel a subscription as it is to sign up for one. The proposal would save consumers time and money, and businesses that continued to use subscription tricks and traps would be subject to stiff penalties.”

“Click to Cancel” would not only require businesses to make it easier for consumers to cancel subscriptions, but it also would make sellers start the cancellation process once a customer says “no” to any additional offers. It would also require sellers to send a reminder to consumers enrolled in “negative option programs” annually that their service will be automatically renewed.

The proposed rule has irked some cable companies who are fighting for the FTC to reconsider its plan to enforce it. In a Jan. 16 FTC hearing, the NCTA – The Internet & Television Association testified against the proposed regulation.

The NCTA represents networks such as Disney, Paramount, A+E Networks, Warner Bros., etc. Also, cable companies such as Comcast and Charter Communications are members of the association. The NCTA argued that the legislation may have a domino effect on consumer services.

“A consumer may easily misunderstand the consequences of cancelling and it may be imperative that they learn about better options,” said Michael Powell, president and CEO of NCTA, during the hearing. “For example, cancelling part of a discounted bundle may increase the price for remaining services. When cancelling phone service, a consumer needs to understand they will lose 9-1-1 or lifeline services as well.”

The NCTA also claims that the proposal will prevent low-income customers from learning about “lower-cost plans and special government programs” that would allow them to keep broadband services.

“The proposal prevents almost any communication without first obtaining the consumer’s unambiguous affirmative consent,” said Powell. “That could disrupt the continuity of important services, choke off helpful information and forego potential savings. It certainly raises First Amendment issues.”

The association also stated in the testimony that three out of four cable and broadband customers who call to cancel their service end up keeping “some or all of it” after talking to an agent. It also claims that the proposed rule could be expensive for businesses.

“Now, not only would the rule undermine a business model that’s working, but it would impose enormous costs on our businesses,” said Powell.

Cable networks in the U.S. are currently facing a “cord-cutting” trend where consumers are cancelling their cable services as they opt for streaming and other forms of entertainment.

According to a recent Kagan U.S. Consumer Insights survey, in the third quarter of 2023, the percentage of households in the U.S. that have cancelled their cable subscriptions increased by 8 percentage points to 35%, compared to the same quarter last year. Northwest Georgia News