Subscription Addiction

We’re so primitive to so many Western European nations. We led for a long time after World War II, have contributed legions to the advancement of technology and have created the financial bastions that still drive global commerce. But we invest in tech so much less than we used to. Our schools, except for the super-elite institutions, are no longer competitive – particularly our public schools from kindergarten through PhD – our infrastructure is a joke and our priorities seem to have solidified to maximize corporate and business values at the expense of environmental, health and personal well-being for our citizens.

Western European nations all have universal healthcare. They watch over the biggest industries in their midst like hawks. Dignity in retirement is a must. Educational opportunities and institutions are a source of pride. They are mindful of corporate and financial institutional tendency to cut personal corners to maximize profits. They truly abhor poverty, do not believe in high levels of criminal incarceration, environmental issues are at the fore and they are exceptionally wary of corporate intrusion into the daily lives of their citizen consumers. In America, we fear big government and hold hallowed big business. In Europe, most fear big business and look to big government to protect them.

You know about the big stuff. We write about it all the time. Like the global platinum standard for those commercial and organizational interests that ply their wares and messages online: the 2018 General Data Protection Regulation (GDPR), which shifts power to consumers and imposes deep restrictions on those attempting to reach them online. You can erase personal information, there are stringent opt-in and cancelation rights, tight privacy rules, detailed notification and cure provisions for entities communicating online, detailed record-keeping, provisions for what happens when data is hacked and massive penalties for anyone who violates these rules… even if their communication is from outside of the European Union. 

Many countries and even a few states (like, of course, California) have used many of the precepts of the GDPR as their roadmap for their own online consumer protection/privacy legal mandates. While gridlocked Congress talks about advancing a national standard, individual states have created a hodgepodge of individual state laws and regulations to fill the void. Given the inclination of GOP control, easily evidenced in Trump-administration agency rulings from the EPA, FCC, FTC and the now-moribund litany of once relevant consumer protection agencies, I suspect that any current potential for online regulation would be more focused on undoing the deeper protections now offered to consumers under state laws.

Sometimes it’s the little things, the “it’s too much of a hassle to turn it off” stuff. By way of example, how many of you have enjoyed the surprise of seeing your credit card billed for a subscription charge from a service you stopped using a long time ago? Gym membership, magazine subscription, content programming, virus protection, etc., etc. 

You many have checked a box for “auto-renew” at some point down the line, but until that credit card expires, you are likely to keep paying for that service without end. For those who have tried to cancel such subscriptions, particularly with companies with notoriously bad customer service, you may have noticed that it is time-consuming, complex, and cancelation requests are often completely ignored.

Sometimes those renewals take place well-before the subscription even expires. Companies often require non-emailed contacts (yup, snail mail!), in writing and by phone (where a person either tells you erroneously that you cannot terminate the service or that you have to pay a fine or tries to upsell you on even more), and you are left hoping for the best. The best is rare.

David Lazarus, writing for the October 29^th Los Angeles Times, amplifies: “[A]utomatic subscription renewals have become a key aspect of what’s been called the “membership economy” — a commercial system based on locking people in to never-ending customer relationships… Amazon does it with its Prime members. Fitness clubs do it. So do most publications, including this one.

“The selling point for automatic renewals is convenience. From a consumer’s perspective, you won’t have to worry about your service or membership lapsing. That’s not a bad thing… The benefits to businesses are perhaps even greater. Churn, or turnover in customers, is reduced, thus lowering customer-retention costs. Future revenue can be anticipated for planning purposes.

“And perhaps the biggest benefit: Businesses know that lots of people won’t bother with the hassle of canceling a subscription. They may not even know they still have a relationship with a company… That’s just free money for the service provider.

“Daniel McCarthy, an assistant professor of marketing at Emory University, compared automatic renewals to a Roach Motel — ‘You check in but you can’t check out.’… He said companies, particularly ones that don’t put much effort into customer satisfaction, will fight to maintain the practice of automatic renewals… ‘They know this is more profit-maximizing for a firm,’ McCarthy said.

“Perhaps that’s why many state governments are taking a more active role in regulating such practices… California enacted one of the country’s toughest such laws in July 2018. Section 17602 of the state Business and Professions Code requires ‘clear and conspicuous’ disclosure of automatic-renewal terms… It also requires a California consumer’s ‘affirmative consent’ to such an agreement — that is, an opt-in to automatic renewals — and notice every time a subscription has been renewed.

“Significantly, the state also requires that people be able to cancel subscriptions online. Some companies try to make the process as difficult as possible, requiring written requests sent by mail… Sometimes opt-out systems work better for consumers than opt-ins, said Stephen Spiller, an associate professor of marketing and behavioral decision-making at UCLA. For example, employer-sponsored retirement programs, which may automatically enroll new hires.

“‘Opt-out policies can be useful nudges to help people do what they want to do anyways,’ which in this case is saving for their sunset years, Spiller said… ‘But if consumers have trouble remembering to cancel an ongoing service, or they fail to notice that they’re still paying for a service that they meant to discontinue, these sorts of policies can make it feel like the firm is taking advantage of a consumer’s innocent mistake,’ he observed.

“A big problem with automatic renewals is they rely on a concept known as a ‘negative option feature.’... What this means is that if a consumer does not proactively cancel a subscription or membership, it will be viewed by the business as a desire to continue service. No further approval for renewal is required… Your silence, therefore, is taken as permission to charge your card.

“As automatic renewals become ever more ubiquitous, with many households having multiple such relationships with businesses, it’s time that the negative option feature be discarded… Instead, state and federal laws should include a mandatory annual opt-in. People should be asked once a year if they want to maintain a subscription or membership. If they do, fine… But if they don’t respond, their silence should be taken as a desire to end the service.”

Do we need such protections? Aren’t we, especially adults, able to operate with more personal responsibility? Or are we so overwhelmed in a digital era that we just might need a little help from those we elected to operate on our behalf but who often turn to the dark side to work for those who contributed the most to get them into office? Exactly. Right now, the Trumpian War on California is the clearest example of crushing citizens to maximize corporate power and profits. When will our government return to focusing on people?

              I’m Peter Dekom, and particularly in an increasingly complex society with greater privacy and consumer challenges, government regulation may be the only functional alternative for most of us.