Posted: February 2, 2023
What is an Example of a Subscription Offer?
Subscription marketing (referred to by the FTC as “negative option” plans) continues to be the Holy Grail of digital marketing.
Example: “$49/month until you cancel”; recurring charges roll along automatically until the customer cancels.
So, if you can find ways to cause subscribers not to cancel, the gravy train continues indefinitely.
How to make it difficult for subscription customers to cancel their subscriptions
There are 2 ways to make cancellation difficult for subscribers.
1. Provide such a compelling benefit that subscribers don't want to cancel.
2. Make it difficult for subscribers to cancel.
This is where “dark patterns” come into play.
How do dark patterns influence consumers?
Generally, dark patterns involve user interface design features that cause consumers to take unintended actions.
Specifically, some dark patterns are “restrictive,” meaning they eliminate or delay necessary information to consumers, and this was the basis for the FTC's blockbuster cans against Vonage in November 2022, resulting in a $100 million settlement.
For more information regarding the FTC's "Dark Patterns" policy statement and the new FTC proposed rule that will cover all subscriptions, visit this page: Online Subscriptions - FTC Enforcement Escalates With "Dark Patterns" & Game Changer Proposed Rule
What does the federal ROSCA statute require?
Background: the federal ROSCA statute requires, among other things, that subscription marketers provide a “simple mechanism” to cancel recurring charges.
The court noted that Vonage made it easy to sign "up to" services. Not so much for how to cancel.
Dark patterns example: this is how Vonage made cancellation difficult
- Cancellation only by speaking to a live “retention agent” on the phone;
- Made it difficult to find the cancelation phone number on the Vonage website;
- Difficulty in transferring calls from customer support to the “retention agent”;
- Reduced hours for cancellation; and
- Failing to provide promised callbacks.
Sam Levine, Director of the FTC's Bureau of Consumer Protection, sent this warning.
“Today the FTC delivers on our commitment to protect consumers from illegal dark pattern tactics by companies that prevent consumers from canceling their services. This record-breaking settlement should remind companies that they must make cancellation easy or face serious legal consequences.”
The essence of Sam Levine's warning is: easy means easy, not just the absence of difficult.