BILL ANALYSIS Ó
AB 2867
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ASSEMBLY THIRD READING
AB
2867 (Gatto)
As Amended May 3, 2016
Majority vote
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|Committee |Votes|Ayes |Noes |
| | | | |
| | | | |
| | | | |
|----------------+-----+----------------------+--------------------|
|Utilities |9-3 |Gatto, Burke, Dahle, |Patterson, Chávez, |
| | |Hadley, Obernolte, |Eggman |
| | |Quirk, Santiago, | |
| | |Ting, Williams | |
| | | | |
| | | | |
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SUMMARY: Requires a cable, satellite, or Internet service
provider, if it enables an individual to subscribe to its
services through an Internet Web site, to also enable all of its
customers to cancel their subscriptions through the Internet Web
site.
FISCAL EFFECT: Unknown. This bill is keyed non-fiscal by the
Legislative Counsel.
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COMMENTS:
1)Author's Statement: "Cable and Internet providers in
particular continue to carry a reputation for poor customer
service and have been known to use aggressive sales tactics to
retain contracts, particularly when consumers request
cancellation. A SoundCloud clip recently went viral
highlighting these aggressive tactics. In this case, the
individual was transferred to a service representative trained
to talk people out of cancelling their contracts. The
recording reveals the service representative continually
asking for an explanation as to why this individual was
choosing to cancel service, even though the man repeatedly
declined to answer. This call was roughly 20 minutes long, at
which point many other consumers would have hung up the phone
before successfully canceling their service? Consumers should
not have to endure aggressive sales tactics that border on
harassment in order to cancel a service contact. Therefore,
AB 2867 will require a cable or Internet service provider who
allows consumers to subscribe to service online to also have
the option to cancel their service online."
2)Background: In 2009, the Legislature passed SB 340 (Yee),
Chapter 350, Statutes of 2009, which requires any business
making an automatic renewal or continuous service to clearly
and conspicuously disclose terms of the offer and obtain the
consumer's affirmative consent to the offer. SB 340 was
prompted by an investigation by the Attorney General against
Time, Inc. in which subscribers to Time, Inc. magazines were
discovering that their subscriptions were automatically
renewed even though the consumer claimed they had never
knowingly consented to the renewal.
3)Comcast SoundCloud Cancellation Call: In 2014, an audio
recording between a Comcast customer and a customer retention
specialist was posted on the online audio Web site SoundCloud.
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The call lasted approximately 20 minutes in which the
customer repeatedly attempted to cancel his service while the
customer retention specialist kept asking why he was doing so
over and over again. Comcast issued an apology and in a memo
to its employees said that it regretted that the incident had
occurred, and that it was painful to listen to, but the
customer retention specialist did a lot of what he was trained
to do. According to the author, canceling services has become
an ordeal that often involves consumers calling in and a
company retention specialist trying to change the consumer's
mind. Most customers would have hung up the phone before
successfully cancelling their service.
This bill requires a cable, satellite, or Internet service
provider that allows an individual to subscribe to its
services through an Internet Web site, to also allow all of
its customers to cancel their subscriptions through the
Internet Web site.
This bill does not prohibit a cable, satellite, or Internet
service provider from offering customers the option to cancel
their subscription through existing mechanisms, in addition to
cancelling their services online.
Analysis Prepared by:
Edmond Cheung / U. & C. / (916) 319-2083 FN:
0002853
AB 2867
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