(Tangent: there is usually a certain number of years of inaction after which they can’t go after you for the debt, unless you again acknowledge the debt. The details and the ways to reset that clock vary by jurisdiction.)
(Tangent: there is usually a certain number of years of inaction after which they can’t go after you for the debt, unless you again acknowledge the debt. The details and the ways to reset that clock vary by jurisdiction.)
It's similar with power/water bills. They can't/won't cut utilities, a form of subscription with a fixed cost in addition to the usage cost, right away (there is a process for that), but you owe the money all the way until they are cut.
But that’s kind of beside the point. When you sign up for a subscription, they only commitment you have made is for the chosen billing interval.
If it’s a month you’ve committed for a month, if three years then you’ve committed for three years.
But you have not in any way shape or form committed to a single second beyond that.
Most (all?) have auto renewals clauses that are very convenient for both the seller and buyer, but to enforce it when the buyer wants to quit is basically extortion.
It is entirely possible to sign up for a paid-monthly perpetual subscription that is much harder to cancel than "Just stop paying".
Gyms are kind of famous for doing this.
"If you do not timely cancel your subscription, your subscription will be renewed at the price in effect at the time of the newel, without any additional action by you, and you authorize us to charge your payment method for these amounts...We do not refund or credit for partially used used billing periods."
This can be easily read and argued as: if you do not cancel, you owe them. You can argue this in front of a judge, but it will be really hard to say it's "extortion" if the cancellation process is streamlined.
But the basic reality is that none of these firms would enter into a contract with terms like these because they are outrageous.
Just think about it. The act of doing nothing over a certain short time period is supposed to legally bind you in a new contract and even with unknown pricing?
This is not business between equals and people behaving this way deserve all the crap they can be tossed.
I don't do yearly subscriptions for this very reason, though.
If Netflix chooses to cancel or pause the subscription after the gift card runs out of funds, that’s their business decision. It’s probably wise as a practical matter for them to limit access to unpaid services when it won’t usually be worth their time and money to force the matter judicially.
But other things they could choose to do include continuing the subscription and using any and all legal debt collection methods until you catch up on the accrued debt, imposing reasonable penalties for nonpayment as per any specific contract wording or any applicable legal defaults, and claiming any damages and/or lawyer fees incurred depending the specific circumstances and the rules of the relevant legal jurisdiction.
The details do vary between countries and between some countries’ subdivisions, sure. But the general principles of what I’m saying are typically true in most countries.
Obviously: read the terms of what you’re signing up for, to check.
It’s probably not worth anyone’s time to go after you more aggressively than that merely for the amount of a gym membership, but if they so choose they’re absolutely allowed to sue you to get a court judgment which appropriate authorities will enforce for them against your assets and income. For larger debts, this is in no way unlikely, if they think you can afford to pay.
To be clear, I support the proposed FTC rule and think it should be as easy to cancel as to sign up. But that procedural question is separate from what commitments may exist. for example, if they give you a discount for a 12-month commitment but still allow you to pay monthly, or if they only offer memberships with a minimum commitment of 12 months, canceling in month 3 would very reasonably still require you to pay the rest of the current 12-month term before your obligation ends.
For some contracts, I can imagine allowing the alternative of repaying the amount of the discount received so far due to the annual commitment, plus interest on that amount. But if you received and used any perks through the annual commitment which would otherwise not have been available to you, or if they incur significant upfront costs for new members which are amortized across the first 12 months of membership, allowing this would not produce a fair outcome.
Maybe you got a rare debt collection agency that doesn’t bother, or one which decides your debt was too small to be worth their bother for that, or maybe your debt collector is actually the accounts receivable department of the gym (which probably isn’t set up to submit credit reports) rather than an external collections agency (which usually would be set up for that).
My earlier replies to you were simply discussing the law as it is and the practices and consequences currently typical in debt collection, aside from when I agreed that changes in the legal rules would be a good thing. Neither your feelings nor my policy preferences change how the world currently works.
If you have the time and volition, and aren't terribly concerned with your credit rating, it can actually be quite fun because a lot of debt collectors routinely violate the law in terms of what they're allowed to do, and you can usually make some money off them in that way.
Of course, I'm talking about small debts. If you owe enough money, the collector will probably sue you, and that truly is no fun.