Suzanne Potter, producer/reporter, California News Service, a bureau of Public News Service.
Two new laws designed to protect California consumers take effect this year. They crack down on hard-to-cancel subscriptions and certain types of bank fees.
New subscription services law
Assembly bill 2863 – which takes effect July 1 – will require subscription services to be as easy to cancel as they are to sign up for.
Robert Herrell – executive director of the Consumer Federation of California – says right now, canceling a recurring subscription can be a time-consuming nightmare.
“And that’s not a bug in the system. That’s a feature of those systems,” said Herrell. “Many companies know that if they make it really hard for you to cancel, people will just either give up or forget about it, or whatever.”
The new Click or Call to Cancel law also requires companies to remind customers once a year that the subscription is active.
The Federal Trade Commission just passed a similar national rule. However, it is already being challenged in court.
Also, It’s unclear whether the new Republican majority in Washington, D.C., will challenge the regulation under the Congressional Review Act.
New insufficient funds law
A second law – which took effect January 1 – takes aim at state-chartered banks and credit unions. The new law bans them from charging fees for non-sufficient funds in cases where the card was rejected, and the sale never went through.
Herrell notes state data shows these NSF fees, which can be up to $40 each, are very lucrative.
“A scary number of state-chartered credit unions are absolutely addicted to this revenue stream,” said Herrell. “And what that means is that they are profiting directly off the backs of poor, working-class people because that’s what the data overwhelmingly shows about who’s paying NSF.”
More good news for consumers. Starting in February, more financial institutions must register with the state and submit data for monitoring.
These include companies that provide debt settlement, student debt relief, financing of private post-secondary education, and income-based cash advances.
