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Pennsylvania House Passes Bills to Regulate Subscription Services

A visual representation of subscription services focusing on consumer rights and transparency.

News Summary

The Pennsylvania House has passed two important bills aimed at regulating subscription services and enhancing consumer protection. These bills focus on ‘negative option’ agreements and require online subscriptions to have clear cancellation options. Additionally, consumers must be notified before automatic renewals. Sponsored by Representatives Joe Ciresi and Lisa Borowski, these initiatives seek to empower consumers with better information while ensuring transparency in subscription practices. The legislation, if passed by the Senate and signed by the Governor, will align Pennsylvania with other states enacting similar consumer protection laws.

Pennsylvania—The Pennsylvania House has passed two significant bills aimed at increasing regulation on subscription services, particularly focusing on “negative option” agreements where consumers are automatically enrolled unless they choose to opt out. This legislative move seeks to enhance consumer protection amid growing concerns about subscription transparency.

The first of the two bills requires that any subscriptions or memberships initiated online must also be able to be canceled online. This is particularly relevant as consumers often struggle to find straightforward cancellation options once they are enrolled. The second bill mandates that consumers be notified before their subscriptions are renewed, allowing them the opportunity to evaluate whether they wish to continue with the service.

These bills reflect similar initiatives that were taken last year by the Federal Trade Commission (FTC), which introduced “click-to-cancel” rules aimed at simplifying the cancellation process for consumers. However, the FTC’s efforts were recently postponed for 60 days due to potential changes caused by the Trump administration’s influence on the agency. Additionally, a federal appeals court has annulled the FTC rules, citing procedural issues that pertained to economic analysis, which stalled consumer protection efforts at the federal level.

Business groups had pushed back against the FTC’s attempts to regulate subscription services, cognizant of the potential impact on their revenue streams. Given the current state of affairs at the federal level, State Representative Joe Ciresi, who sponsored one of the bills, highlighted the pressing need for Pennsylvania to take action. Ciresi acknowledged the difficulties consumers face when attempting to cancel subscriptions after trial periods, advocating for clearer and more accessible options for cancellation.

The bill sponsored by Ciresi requires that information about how to cancel a subscription must be clearly displayed, with specific stipulations on font size to ensure visibility. Complementing this effort, Representative Lisa Borowski’s bill focuses on enhancing transparency regarding automatic renewals and ensuring that consumers have adequate information to make informed decisions about their subscriptions.

It is important to note that these bills will only apply to non-regulated services. They do not extend to utilities that are already governed by state or federal laws, nor do they affect gym memberships, which are regulated under the state’s Health Club Act. This targeted focus aims to ensure clarity and fairness in industries not currently subject to strict regulations.

The bills garnered broad bipartisan support within the Pennsylvania House, an encouraging sign of collaborative efforts across party lines to protect consumer rights. Should the legislation pass in the state Senate and receive approval from Governor Josh Shapiro, Pennsylvania would join a growing list of states—including New York, California, Minnesota, Tennessee, and Virginia—that have enacted similar consumer protection laws.

Ultimately, the objectives behind these legislative initiatives are clear: to empower consumers with better information and more options when it comes to subscription services, while also aiming to maintain a healthy environment for businesses to operate. The push for these bills arises from ongoing discussions about consumer rights and the need for businesses to uphold transparency in their billing practices.