TRENTON — The Senate Commerce Committee advanced legislation sponsored by Senators Gordon Johnson and Joseph Cryan, which would require a cancellation option for any subscription service and establish certain standards pertaining to the use of negative option features.
The bill would require all subscription service providers to allow consumers to cancel or terminate a subscription service using the same medium through which the consumer is accustomed to interacting with the provider, including in person, by telephone, mail, email, or online.
“For too long, companies have taken advantage of consumers by making it easy to sign up for subscriptions while at the same time intentionally making it difficult to cancel them,” said Senator Johnson (D-Bergen). “I previously sponsored legislation to make it easier to cancel unwanted gym memberships, and expanding that sentiment to all subscription-based businesses will save people money and foster more transparent business practices to benefit consumers.”
The bill, S-3877, would further require that subscription providers who provide an online cancellation option must make a direct link or button on their website, in a prominent location accessible through a customer account or profile on the subscription service provider’s website. Alternatively, the option can be in the user settings on a consumer’s smartphone or tablet or a termination email formatted and provided by the subscription service provider that a consumer can email to the provider without providing any additional information.
“It is evident, based on the increase in daily complaints to federal authorities, that a huge number of people have unwanted subscriptions that have become nearly impossible to cancel,” said Senator Cryan (D-Union). “No one should have to jump through hoops to stop money from being taken out of their account every month. This legislation will ensure that if an individual subscribes to a service online, that they can also cancel it online with the click of a button.”
Additionally, the bill would prohibit subscription service providers who offer a negative option feature from misrepresenting any material fact made while marketing, failing to clearly and conspicuously disclose material terms before obtaining a consumer’s billing information, failing to obtain a consumer’s express informed consent before charging the consumer, and failing to provide a simple mechanism to cancel and immediately halt charges.
The bill advanced out of committee in a 5-0 vote.