FTC cracking down on ‘deceptive’ subscription tactics

DEDHAM, Mass. — Monthly fees. Annual fees. 30-day free trials.

We’re bombarded everyday with online offers to sign-up and subscribe, but it’s not always clear what we’re committing to when we click “accept” and federal regulators are going after companies that use deceptive tactics to trick consumers.

“What I can tell you is the problem is worse than it’s ever been,” said James Kohm, associate director with the Federal Trade Commission’s Division of Enforcement.

Kohm said the FTC has struggled in recent years to keep up with the explosion of subscription services, something he refers to as a “subscription economy.”

Regulators are specifically targeting companies that use deceptive “negative option billing,” a practice in which a company interprets a consumer’s silence or inaction as consent to charge them.

“If people aren’t very clear that you’re entering into that transaction, a lot of people get billed for things they don’t want,” Kohm said.

Kohm said the most common complaints involve hidden fees in the fine print, and companies that make it too difficult and time-consuming to cancel a subscription.

Before hitting accept, Kohm says to:

  • RESEARCH THE COMPANY - Read other reviews to see what others are saying
  • KNOW THE CANCELLATION PROCESS from top to bottom so you understand what you need to do to opt out
  • MAKE SURE THERE’S NO STRINGS ATTACHED - If a company says something is free, make sure it doesn’t come with hidden fees

“Whenever you are offered something free, scour the offer to make sure you’re not then going to end up paying later,” Kohm said.

Katie Williams in Roslindale said she and her husband recently had to jump through hoops to cancel an online streaming service.

“I think it’s hard because it’s not always very visible when you’re initially signing up for things,” Williams said. “[Cancelling is] definitely not easy, which is very intentional I think.”

Hanna Stuart-Shor said she tries to check her bank account every day for suspicious charges.

“I don’t do it often enough, but when I check my account, I notice random fees from Amazon, and I don’t know what it’s from,” Stuart-Shor said.

“I’m guilty of it myself. I’ll sign up for something and then forget about it, and then later on I’ll see this huge charge,” she said.