April 9, 2019 - According to a report made public today by Option consommateurs, automatic subscription, to online services following a free or discounted trial period represents significant sums for consumers in the medium term. Forgetting to unsubscribe can cost more than $100 for a year.
FabFitFun, Good Food, Netflix, Spotify... More and more online companies are changing their business model: they no longer offer a specific product or products, but rather a subscription giving access to a service enabling the delivery of goods or access to a virtual library. To attract customers, these companies offer their subscriptions in the form of negative-option contracts: consumers benefit from a free or discounted trial period, after which they are automatically subscribed to the service at the current price. This type of contract has come in for some criticism, and Option consommateurs wanted to find out more about it in this report.
Option consommateurs analyzed the contracts of online companies offering negative option subscriptions. This analysis revealed that, in the medium term, subscribing to the services of these companies represents significant sums for consumers, i.e. more than $100 per year. If consumers forget to unsubscribe, it can cost them a lot of money for a service they don't want.
It was also found that the contracts analyzed lacked a great deal of uniformity; they are given various names but never the word "contract", they all contain different clauses, and their unsubscribe clauses are incomplete. This makes it difficult for consumers to find their way around.
As part of this study, a consultation was carried out with some 50 Canadian consumers who had automatically signed up for online services following a free or discounted trial period. They said they didn't feel trapped by the negative option, but that they would have preferred to give their payment details at the end of the trial period.
In Canada, this practice is only regulated in Manitoba and Quebec. In both provinces, it is simply forbidden for a merchant to require a notice from a consumer who has received a good or service free of charge or at a discount for a specified period, indicating that he or she no longer wishes to receive this good or service at the regular price. In the European Union and the United States, rather than prohibiting the practice, legislators have introduced disclosure requirements for merchants.
This report contains valuable information on the supervision of automatic subscription contracts following a free or discount period. Despite the fact that consumers surveyed for the study say they appreciate this type of contract, Option consommateurs believes that the procedures used, particularly with regard to the information provided to consumers, need to be improved. Fortunately, solutions do exist and can be implemented.
The research entitled "Qui ne dit mot consent. Opting out in the digital age" was was carried out by Option consommateurs thanks to a contribution from the Office of Consumer Affairs of Innovation, Science and Economic Development Canada.
Option consommateurs is a not-for-profit association whose mission is to defend the rights and interests of consumers. It is closely involved in issues related to personal finance, business practices, financial services, protection of personal information, energy, health and agri-food.
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Elise Thériault, tel. : 514 777-6133
