Latest news with #NCCC
New Straits Times
04-08-2025
- Business
- New Straits Times
NST Leader: Subscription squeeze
There was a time when entering into a contract was as simple as ABC. The company handed you a contract and you sign off if the terms were acceptable. When you wanted to end the service, you pay the current bill and that was it. But with competition getting intense, businesses have become creative by inventing the subscription contract that comes with a self-renewal clause, unless terminated with notice. And the auto-renewal clause comes with a termination penalty. As high as RM58,000 for quitting a wellness programme, as one complainant told the National Consumer Complaints Centre (NCCC). Herein lies a trap. When you try to unsubscribe from the service, it is like searching for a needle in a haystack. If you managed to do so, you end up paying a hefty penalty. Is this legal? Here, we come face to face with the "on the one hand and on the other hand" argument of lawyers. As a general legal principle, a contract is an agreement between parties. Were the terms made explicit to the consumer? If so, then the consumer's case ends there, except if the penalty is excessive, like the RM58,000 imposed by the wellness company. In such cases, it is best to proceed to the Tribunal for Consumer Claims. Vigilance is the key. But being vigilant isn't easy in a business environment where companies push the concept of consent to the edge of the law. Complaints to the NCCC tell us that the subscription contracts need regulatory intervention. Not that Malaysia doesn't have laws. It has several, but unlike the United Kingdom, not specific to subscription contracts. Do we need one? Certainly, but first, let's look at what we already have. The Contracts Act 1950 (CA) is one of several. Subscription agreements are contracts, they clearly fall under it. The CA makes consent of the parties a critical element. Another, and perhaps more relevant, is the Consumer Protection Act (1999), which specifically addresses unfair contract terms. Astronomical penalties, either made known or hidden, are likely to be treated as such. So will deceptive auto-renewals. Finally, the Communications and Multimedia Act 1998 (CMA). Interestingly, the CMA imposes a duty to act reasonably on all service providers. If the auto-renewals and penalties are not made known to and agreed by the consumer, then the service providers could be found to have failed in their duty to act reasonably. A point needs to be made, though. Despite scores of complaints to the NCCC, there has been no litigation on such issues. Neither have the regulators acted on the complaints, Perhaps, they are waiting for the consumers to lodge a report with them. A report from the consumer shouldn't be the only way for regulators and enforcement agencies to act. Even the police are using viral videos to launch their investigations. The regulators must go where the complaints are: consumer associations, NCCC and media reports. Malaysia needs a specific law such as the UK's Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013. Proper consent of the consumer, together with a cooling-off period of 14 days, is a pillar of these regulations.
New Straits Times
04-08-2025
- Business
- New Straits Times
NST Leader: Subscription squeeze - Regulating the auto-renewal trap
THERE was a time when entering into a contract was as simple as ABC. The company handed you a contract and you sign off if the terms were acceptable. When you wanted to end the service, you pay the current bill and that was it. But with competition getting intense, businesses have become creative by inventing the subscription contract that comes with a self-renewal clause, unless terminated with notice. And the auto-renewal clause comes with a termination penalty. As high as RM58,000 for quitting a wellness programme, as one complainant told the National Consumer Complaints Centre (NCCC). Herein lies a trap. When you try to unsubscribe from the service, it is like searching for a needle in a haystack. If you managed to do so, you end up paying a hefty penalty. Is this legal? Here, we come face to face with the "on the one hand and on the other hand" argument of lawyers. As a general legal principle, a contract is an agreement between parties. Were the terms made explicit to the consumer? If so, then the consumer's case ends there, except if the penalty is excessive, like the RM58,000 imposed by the wellness company. In such cases, it is best to proceed to the Tribunal for Consumer Claims. Vigilance is the key. But being vigilant isn't easy in a business environment where companies push the concept of consent to the edge of the law. Complaints to the NCCC tell us that the subscription contracts need regulatory intervention. Not that Malaysia doesn't have laws. It has several, but unlike the United Kingdom, not specific to subscription contracts. Do we need one? Certainly, but first, let's look at what we already have. The Contracts Act 1950 (CA) is one of several. Subscription agreements are contracts, they clearly fall under it. The CA makes consent of the parties a critical element. Another, and perhaps more relevant, is the Consumer Protection Act (1999), which specifically addresses unfair contract terms. Astronomical penalties, either made known or hidden, are likely to be treated as such. So will deceptive auto-renewals. Finally, the Communications and Multimedia Act 1998 (CMA). Interestingly, the CMA imposes a duty to act reasonably on all service providers. If the auto-renewals and penalties are not made known to and agreed by the consumer, then the service providers could be found to have failed in their duty to act reasonably. A point needs to be made, though. Despite scores of complaints to the NCCC, there has been no litigation on such issues. Neither have the regulators acted on the complaints, Perhaps, they are waiting for the consumers to lodge a report with them. A report from the consumer shouldn't be the only way for regulators and enforcement agencies to act. Even the police are using viral videos to launch their investigations. The regulators must go where the complaints are: consumer associations, NCCC and media reports. Malaysia needs a specific law such as the UK's Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013. Proper consent of the consumer, together with a cooling-off period of 14 days, is a pillar of these regulations.
The Sun
04-08-2025
- Business
- The Sun
Digital subscriptions: Easy to join, hard to cancel
IN today's digital economy, subscribing to a service takes only seconds but cancelling it can take hours, repeated calls, or in some cases, a change of credit card just to stop the charges. The National Consumer Complaints Centre (NCCC) has received a growing number of complaints from Malaysian consumers who feel trapped in unwanted subscriptions, unable to cancel services without facing unnecessary delays, penalties or complicated processes. From streaming platforms and online apps to gym memberships, telecom plans and prepaid service packages, consumers are reporting a pattern: signing up is simple but unsubscribing is frustratingly difficult. These practices, whether designed intentionally or by inertia, unfairly tilt the marketplace in favour of businesses, often at the expense of consumer rights and financial well-being. In many cases, consumers unknowingly commit to long-term contracts through 'free trials' that automatically convert into paid plans. Others face high exit penalties for trying to leave gym or telco contracts, even when the service no longer meets their needs. Worse, some digital platforms bury the cancellation button deep within account settings or force users to call a hotline to quit a service they joined online. For example, a user from Negeri Sembilan shared their experience involving the closure of an account on behalf of a deceased family member. 'I submitted all the required documents to the pay-TV service provider on July 15. After three days, no one contacted me. I even went in person to their branch office in Seremban 2 but was told that there was no record of any account closure request in their system. Instead, I was issued a new bill to pay, even though the original account had no outstanding balance.' These tactics, commonly referred to as 'dark patterns', are designed to delay or discourage cancellation. One consumer told us they were charged RM60 a month for nearly a year after a 10-day free trial ended, without any clear way to cancel online. Another user was charged nearly RM2,000 to exit a broadband plan early, despite poor service delivery. These are not isolated cases. A Southeast Asian survey found that 69% of Malaysian consumers are frustrated that they cannot pause or stop subscriptions when needed while 41% admitted they were still paying for services they forgot they had. In short, many Malaysians are losing money on services they do not want, do not use or cannot easily cancel. While Malaysia's Consumer Protection Act 1999 (CPA) provides some safeguards, particularly for prepaid 'future services' like gym or tuition packages, these do not extend clearly to digital, auto-renewing or monthly subscriptions. For example, the CPA requires partial refunds if a consumer cancels a prepaid service contract but offers no clear protection for services billed monthly or those that auto-renew without explicit consent. Telecommunications contracts are another grey area. Under current practice, companies are permitted to set their own penalties for early termination, with little room for negotiation. This puts consumers in a difficult position: either tolerate poor service or pay a hefty sum to escape. There is currently no standard policy requiring service providers to release customers without penalty in cases of unresolved service failure. Other countries have taken proactive steps to protect consumers from these challenges. In the UK, the government introduced a Digital Markets and Consumers Bill that requires companies to send clear reminders before a subscription is renewed and mandates that cancelling a subscription must be 'as easy as signing up'. In simple terms, if you clicked once to subscribe, you should be able to click once to unsubscribe. In Australia, consumer advocacy groups are calling for a new 'unfair trading practices' law that would specifically target 'subscription traps' and ban designs that deliberately make cancelling hard. India has also updated its consumer guidelines to outlaw several manipulative online practices, including hard-to-cancel subscriptions. These reforms are built on a simple but powerful principle: consumers should remain in control of their commitments. When cancelling a service becomes an obstacle course, it undermines that control. At NCCC, we believe it is time for Malaysia to strengthen consumer protections in this space. Specifically, we urge the relevant ministries and agencies to consider: A 'click-to-cancel' requirement: Any service that allows online sign-up should also allow simple online cancellation, with no hidden steps, excessive confirmations or required phone calls. A cooling-off period: Introduce a standard 14-day cooling-off period for all subscription contracts, especially those entered into online or by phone. This allows consumers to cancel without penalty if they change their mind or realise they were misled. Regulation of auto-renewals: Require explicit, informed consent before any automatic renewal of a subscription. Reminders should be sent at least seven days before renewal, giving consumers the chance to opt-out easily. Limits on early termination penalties: For longer-term contracts, for example, gym and broadband, establish reasonable limits on early exit fees, especially when consumers cancel due to poor service. Guidelines against dark patterns: Ban manipulative cancellation designs and require businesses to be transparent and fair in their subscription models. Public awareness campaigns: Many consumers are unaware of their existing rights under the CPA, especially regarding refunds for unused prepaid services. Greater outreach and education are needed. These steps are not radical. They reflect a growing global consensus that subscription-based services must be fair, transparent and respectful of consumer choice. At a time when Malaysia is promoting digital adoption, innovation and e-commerce, ensuring fair digital practices is essential. If consumers feel trapped or tricked, they will lose confidence in the very tools meant to improve convenience and choice. We believe that implementing fair cancellation practices is not just good policy; it is good business. Studies abroad show that companies with clear and easy cancellation policies enjoy higher consumer trust and return rates. Let us make it easier for Malaysians to manage their commitments, avoid financial loss and participate in a digital economy that respects their rights. We call on policymakers, regulators and industry leaders to take this issue seriously. It is time to say clearly: starting a subscription should take seconds and ending it should, too. Saral James Maniam
New Straits Times
02-08-2025
- Health
- New Straits Times
High penalties trap consumers in unwanted wellness subscriptions
KUALA LUMPUR: Consumers attempting to cancel unwanted wellness subscriptions are being hit with penalties as high as RM58,000, the National Consumer Complaints Centre (NCCC) said. NCCC senior manager Saral James Maniam said that the RM58,000 penalty applied to just one service. The centre has also received complaints involving digital and media services. She said the NCCC had observed a rise in complaints from consumers who felt trapped by unwanted subscriptions due to excessive delays, steep penalties or complicated cancellation procedures. The centre is preparing a report covering 2019 to 2024 and does not intend to reveal complaint totals until its expected release in November. Saral said, however, that the figures were alarming. She said 77 per cent of the complaints received were related to wellness services, such as gyms, beauty, skin and weight management, with digital services in telecommunication and streaming making up the remaining 23 per cent. She said gym memberships topped the list at 42 per cent of total complaints, mostly from those aged between 18 and 40. Weight management programmes, which often come with hefty price tags and lengthy contracts, made up a further nine per cent. "This was followed by spa and beauty services at 14 per cent and facial or cosmetic skin treatments at 12 per cent, mostly involving working professionals and urban women aged between 20 and 45. "In digital and media services, telecommunications contributed 13 per cent and streaming subscriptions 10 per cent. "These services span all age groups, but subscription traps disproportionately affect elderly users and digitally vulnerable groups, including those unfamiliar with opt-out processes or digital billing," Saral told the New Sunday Times. Saral said more elderly consumers were also reporting complaints involving telecommunication services, especially over unsolicited charges and unclear auto-renewal plans. She said penalties imposed on consumers seeking to terminate contracts typically range from RM1,500 to RM5,000 for gym memberships, RM1,300 to RM10,000 for spa and beauty services and RM6,400 to RM40,000 for skin treatments. Other complaints included termination charges for telecommunication packages (RM300 to RM3,800), broadcast TV subscriptions (RM170 to RM10,000) and weight management programmes (RM1,500 to RM58,000). "Signing up for a plan is simple, but cancellation is difficult. "In many cases, consumers unknowingly commit to long-term contracts through free trials that automatically convert into paid plans. "These practices, whether designed intentionally or by inertia, unfairly skew the marketplace in favour of businesses, often at the expense of consumer rights and financial wellbeing." Saral said while the Consumer Protection Act 1999 offers safeguards, particularly for prepaid "future services", such as gym or tuition packages, it does not cover digital or auto-renewing subscriptions. Telecommunications contracts, she said, remain a regulatory grey area. Under current practices, service providers are allowed to impose early termination penalties at their own discretion, with little to no consumer recourse. "This puts consumers in a difficult position, either to tolerate poor service or pay a hefty sum to escape." Saral added that there was no standardised requirement for companies to waive penalties in cases of unresolved service failure. CONSUMER ADVICE She advised consumers to review contracts and cancellation terms before signing up, and to use credit cards instead of debit cards for recurring charges, which offer more protection for dispute resolution. "Do not scan QR codes or provide card information without verifying the merchant. "In one case, a consumer was charged RM99 after scanning a QR code on a water meter from a third-party service provider," She urged affected consumers to lodge complaints through my or take matters to the Tribunal for Consumer Claims. CALL FOR STRONGER PROTECTION Saral said Malaysia should adopt global best practices to close loopholes and strengthen consumer protections. She said the government should establish a centralised redress platform — a one-stop portal involving the Domestic Trade and Cost of Living Ministry, Malaysian Communications and Multimedia Commission, Health Ministry and local councils — to streamline licensing, regulation and consumer complaints. "Each of these agencies and ministries is responsible for licensing, regulation and consumer redress in their domains," she said. Saral urged regulators to mandate clear disclosures on contract duration, auto-renewal terms, cancellation procedures and total upfront and recurring costs, practices already in place in countries, like Australia and the United Kingdom. "In Australia, the Competition and Consumer Commission enforces mandatory pre-contract disclosures. "In the United Kingdom, companies must comply with the Consumer Contracts Regulations 2013, ensuring full disclosure." Saral proposed a cooling-off period for high-value contracts, especially for gyms, slimming centres and beauty packages.
The Star
27-07-2025
- Business
- The Star
Easy to subscribe, hard to cancel
In today's digital economy, subscribing to a service takes only seconds. But cancelling it can take hours, repeated calls, or, in some cases, a change of credit card to stop the charges. The National Consumer Complaints Centre (NCCC) has received a growing number of complaints from Malaysian consumers who feel trapped in unwanted subscriptions, as they are unable to cancel services without facing unnecessary delays, penalties or complicated processes. From streaming platforms and online apps to gym memberships, telecom plans, and prepaid service packages, consumers are reporting a pattern: signing up is simple, but unsubscribing is frustratingly difficult. These practices – whether designed intentionally or by inertia – unfairly tilt the marketplace in favour of businesses, often at the expense of consumer rights and financial well-being. In many cases, consumers unknowingly commit to long-term contracts through 'free trials' that automatically convert into paid plans. Others face high exit penalties for trying to leave gym or telco contracts, even when the service no longer meets their needs. Worse, some digital platforms bury the cancellation button deep within account settings, or force users to call a hotline to quit a service they joined online. These tactics, commonly referred to as 'dark patterns', are designed to delay or discourage cancellation. A Southeast Asian survey found that 69% of Malaysian consumers are frustrated because they can't pause or stop subscriptions when needed, while 41% admitted to still paying for services they had forgotten about. In short, many Malaysians are losing money on services they do not want, do not use, or cannot easily cancel. While Malaysia's Consumer Protection Act 1999 (CPA) provides some safeguards, particularly for prepaid 'future services' such as gym or tuition packages, these do not extend to digital, auto-renewing, or monthly subscriptions. Telecommunications contracts are another grey area. Under current practice, companies are permitted to set their penalties for early termination, with little room for negotiation. This puts consumers in a difficult position: either tolerate poor service or pay a hefty sum to escape. Currently, there is no standard policy requiring service providers to release customers without penalty in cases of unresolved service failures. NCCC believes it is time for Malaysia to strengthen consumer protections in this space. We urge the relevant ministries and agencies to consider: 1. A 'Click-to-Cancel' Requirement: Any service that allows online sign-up should also allow simple online cancellation, with no hidden steps, excessive confirmations, or required phone calls. 2. A Cooling-Off Period: Introduce a standard 14-day cooling-off period for all subscription contracts, especially those entered into online or by phone. This allows consumers to cancel without penalty if they change their mind or realise they were misled. 3. Regulation of Auto-Renewals: Require explicit, informed consent before any automatic renewal of a subscription. Reminders should be sent at least 7 days before renewal, allowing consumers to opt out easily. 4. Limits on Early Termination Penalties: For longer-term contracts (e.g. gym, broadband), establish reasonable limits on early exit fees, especially when consumers cancel due to poor service. 5. Guidelines Against Dark Patterns: Ban manipulative cancellation designs and require businesses to be transparent and fair in their subscription models. 6. Public Awareness Campaigns: Many consumers are unaware of their existing rights under the CPA, especially regarding refunds for unused prepaid services. Greater outreach and education are needed. These steps are not radical. They reflect a growing global consensus that subscription-based services must be fair, transparent, and respectful of consumer choice. Let's make it easier for Malaysians to manage their commitments, avoid financial loss, and participate in a digital economy that respects their rights. Starting a subscription should take seconds, ending it should, too. Saral James Maniam Senior Manager of National Consumer Complaints Centre (NCCC)
