Subscription Services Get a One-Click Makeover: New Consumer-Friendly Law Signed in California
On September 24, 2024, California took a major step to protect consumers from difficult subscription cancellation processes. Assembly Bill 2863, signed into law by Governor Gavin Newsom, will allow Californians to cancel subscriptions with a single click, effective July 2025.
Subscription models—from music streaming to software—have made accessing services convenient, but they’ve also caused frustrations with auto-renewals and complicated cancellations. Consumers have long complained about the struggles of trying to opt-out, including endless hold times with customer service, hidden cancellation buttons, and surprise renewal charges.
AB 2863, sponsored by Assembly member Pilar Schiavo, aims to eliminate these obstacles by requiring businesses to provide a simple, online cancellation option. In addition to a toll-free number, companies must offer a clickable link or preformatted email that lets users cancel as easily as they signed up. The law also mandates annual reminders about the subscription cost and instructions on how to cancel.
What Does the Law Cover?
The new rules apply to any subscriptions that automatically renew, continue until canceled, or convert from free to paid services. Crucially, businesses must secure “express affirmative consent” from consumers before enrolling them into any subscription program. This ensures that customers won’t be surprised by unexpected charges.
Additionally, the law requires businesses to notify customers in advance of any price changes, helping to prevent the dreaded “sticker shock” when checking monthly bills. This feature builds consumer trust by offering full transparency around costs.
A Broader Movement for Consumer Protection
While California leads the way with this bill, the Federal Trade Commission (FTC) has been working on its own “Click to Cancel” rule, aimed at simplifying subscription cancellations across the United States. However, the path to federal regulations is often complicated by legal challenges. Robert Herrell, executive director of the Consumer Federation of California, stated that AB 2863 ensures Californians are protected even if the FTC’s rule faces delays or opposition.
AB 2863 provides comprehensive protections, and in some areas, surpasses the FTC’s proposed measures. By moving forward with this legislation, California is ensuring that its residents have the strongest protections in the country when it comes to subscription services.
What It Means for Businesses and Consumers
The law balances business needs with consumer protection. While subscription models offer companies predictable revenue, the use of “dark patterns”—manipulative design tactics that make it harder to unsubscribe—has been a sore spot for many consumers. AB 2863 ensures companies can still grow their subscriber base but without making it difficult for people to leave.
From gym memberships and streaming services to software subscriptions and wine clubs, this law covers a wide range of industries. By providing an easy way to cancel and setting new rules for transparency, the law empowers consumers to control their subscriptions, helping reduce frustration and unexpected charges.
For businesses, this change is an opportunity to foster trust with their customer base. Consumers are more likely to stick with a company that respects their ability to easily opt in and out of services. While the subscription economy continues to grow, businesses must align with these new rules to stay compliant and improve customer retention.
Looking Ahead: What Consumers Should Expect
Starting in July 2025, Californians will experience a more transparent and user-friendly process for managing subscriptions. Whether it’s canceling a monthly subscription, pausing a service, or managing renewal costs, AB 2863 ensures that consumers remain in control. No more lengthy customer service calls, no more hidden links.
As more states consider similar legislation, California’s approach might set the standard for subscription services across the nation.
This story originally appeared in Los Angeles Times.