Most of us have been there. You sign up for a new product or service online – perhaps after coming across an almost irresistible free trial offer – only to run into a brick wall when you try to cancel it later.
It’s a frustrating and often costly experience, but a new bipartisan bill in Virginia’s House of Delegates is seeking to change all of that.
The legislation – HB 78 – was introduced by Delegates Glenn Davis (R-Virginia Beach) and Sally Hudson (D-Charlottesville). The purpose is to ban practices that make it exceedingly difficult for customers to cancel subscriptions for services they no longer want or need.
The bill specifically targets companies that start out by offering free trials and then lock customers into auto-renewals or ongoing charges.
Last week, several state lawmakers took to social media to argue in favor of the proposed new law.
“Pleased to report that my HB78 was unanimously reported out of Commerce and Energy Subcommittee. If you can sign up for a service online, you should be able to cancel online. We are one step closer to making that a reality,” Davis said in a January 20 Facebook post.
Hudson similarly argued for the bill on Twitter, citing the example of gym memberships at big fitness chains. Consumers, she said, can sign up for a new gym plan online with minutes, often by taking advantage of bargain pricing at the outset. But canceling the membership can be an entirely different story, sometimes requiring a headache-inducing amount of hoop-jumping.
If HB 78 becomes law, companies that initiate automatic renewals at the end of a trial period would need to “notify the customer of the automatic renewal seven days prior to expiration of the free trial and obtain the consumer’s affirmative consent to the automatic renewal beyond the trial period.”
The bill would also require companies to offer “a conspicuous online option to cancel a recurring purchase of a good or service within the website by which such purchase was made.”
In other words, if the legislation succeeds, a trial period could no longer automatically transition into a recurring payment cycle without the direct approval of the consumer. Customers also wouldn’t be forced into stressful back-and-forth phone calls with sales agents when trying to end a service they signed up for online.
While working to drum up support for the proposal, Hudson Tweeted out a video investigating the process of canceling a Planet Fitness gym membership. In the clip, a woman undergoes a frustrating experience when she attempts to opt out of her gym plan. Every location has its own policy for ending the service, she learns, and most don’t offer an online cancelation option. Instead, an agent tells the woman she’ll need to either cancel the service in person or send a written letter – by snail mail – which would need to be received by a specific date of the month.
Del. Sam Rasoul (D-Roanoke) called such practices “predatory” and said the new bill would make significant progress in providing needed protections for consumers.
A similar law went into effect in California in 2018. It requires companies to be transparent about their cancelation practices so that a customer can’t, for instance, be forced to dig up a well-hidden phone number and then deal with a run-around when trying to end a recurring plan.
A federal version of the bill was also drafted by a bipartisan group of U.S senators last year, but progress on the legislation stalled out, and it never made it to the hearing stage.
Virginia’s HB 78 was read before the full House of Delegates on January 27. If it passes the House, it will advance to the Senate for further consideration.