Washington AG Signals Enforcement on Automatic Renewals
Earlier this week, we posted that a plaintiff filed a proposed class action against the NFL over its automatic renewal practices. The complaint alleges that the NFL used “dark patterns” to enroll consumers in its NFL+ subscription without consent and that it then made it difficult for them to cancel. Although we don’t know exactly what happened in that case, these are themes that come up frequently in automatic renewal cases. These themes were also echoed in an announcement by Washington AG Bob Ferguson this week.
The Washington AG’s office recently commissioned an online survey of 1,207 adult Washington consumers “to better understand if consumers have encountered certain advertising and sales practices related to recurring charges and hidden fees.” Although the survey covers more ground, a press release issued by the AG’s office focuses on findings related to subscription services. Here are some of the highlights from the survey:
- 59% of respondents claimed that in the last four years they unintentionally enrolled in a subscription plan that automatically billed them when they thought they were making a one-time purchase.
- Of those respondents, 51% cited a pre-checked box as the reason they unintentionally enrolled. (Not surprisingly, when asked, 70% of all respondents opined that pre-checked boxes should be prohibited.)
- Notably, only 2.75% of respondents reported that they did not cancel the subscription because it was “too difficult to cancel.” Although that’s a small percentage, the AG estimates that this means that approximately 100,000 Washingtonians could not cancel an unwanted subscription.
Companies should take a close look at their automatic renewal practices to ensure they clearly disclose the material terms and minimize the possibility that consumers will be surprised when they see multiple charges. Think carefully about using pre-checked boxes. Although they are arguably not prohibited by law, it’s clear that many regulators frown on them. In fact, some settlements in this area specifically ban companies from using them. Finally, be sure to monitor and address complaints before someone else does.
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