Netflix and Disney Make It Hard to Cancel Your Subscription — New Law Could Save You $1,500 Per Year
Written by
Seychelle Thomas
Edited by
Ashley Almario
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If you’ve ever tried to cancel a subscription, you’ve likely found yourself thinking that signing up wasn’t nearly as difficult. Although it only took a few clicks to sign up for the service, you now have to wait on hold, send an email, or even show up in person to cancel.
Click-to-Cancel
A new proposal from the Federal Trade Commission (FTC) seeks to change that by instituting a new “click-to-cancel” provision that applies to streaming services as well as other subscriptions like newspapers or gym memberships.
This proposal preceded last month’s FTC allegations against Amazon.com, claiming the company knowingly “duped” consumers and allegedly sabotaged Amazon Prime cancellation attempts.
Thousands of frustrated consumers have reported issues like billing without consent, lack of adequate disclosures, and difficult or impossible cancellations to the FTC. Click-to-cancel protocols seek to implement three principal changes to address these complaints:
- Simple cancellation: If you signed up online, you’re able to cancel online in the same number of steps — making it just as easy to cancel as it was to sign up.
- Sellers must take “no” for an answer: Some companies present endless cancellation alternatives like modifications, discounts, or additional offers to dissuade you from canceling. Under this rule, sellers have to ask if you’re interested in those offers first. If you say “no”, they have to immediately begin the cancellation process.
- Annual reminders for auto-renewals: If you’ve ever been caught off guard by a large automatic annual subscription payment, you know it can throw off your budgeted finances significantly. Click-to-cancel would require sellers to send an annual reminder for subscriptions (outside of physical goods) before automatically renewing.
Opposition From Companies
Trade organizations such as the Internet and Television Association (NCTA) have issued public comments in support of its member companies — including Disney Entertainment, Paramount Global, and Warner Bros. Discovery.
In opposition to the proposed rule, NCTA shared concerns about negative unintended consequences for consumers and companies. Its public comment on the proposal cited severely curtailed communication with customers, a lack of industry-specific rules and alleged institutional overreach.
How Much Consumers May Save
As economic tensions remain high, cost-conscious consumers are canceling subscriptions in response to rising costs. The April 2023 Deloitte Media Trends report found that 44% of consumers canceled a paid streaming video-on-demand service within the previous six months prior to publication. A full 26 percent of survey respondents cited saving money as their reason behind canceling an entertainment subscription.
Although you might not think you’re spending much on subscription services, you could be spending more than you believe. A 2022 study by C+R Research found consumers estimated average monthly subscription spending at $86. Upon examining itemized expenses, the average monthly subscription spending was about 2.5 times higher, at $219 per month.
If consumers from this report canceled subscriptions making up the $133 gap between their estimated cost and their true itemized expense, they could save an average of $1,596 per year.
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