Federal regulators are looking at ways to make it harder for companies to trap consumers in monthly subscriptions that drain their bank accounts, attempting to respond to a proliferation of complaints over the past few years.

The review by the Federal Trade Commission comes as a number of companies have faced civil lawsuits and government investigations at a time when the marketing of subscription services has spread throughout the U.S. economy. The news media industry and other sectors have lobbied against stricter rules, and federal legislation that would curtail some of the practices has stalled. But that could soon be changing.

“The commission is trying to figure out how best to respond to this problem and, in doing so, is looking at all its tools,” which include law enforcement, regulation and consumer education, said James Kohm, associate director of the FTC’s enforcement division, in a phone interview. “Clarifying the rules really does have a big effect.”

Consumers have complained about a range of business practices. For example, some have said that they were tricked or put into recurring monthly charges without their consent. Others have said that companies make it extraordinarily easy to sign up for recurring subscriptions but much more difficult to cancel.

The FTC so far has had mixed success in curbing the practices. Last year, the agency won a $10 million settlement from the children’s education company that makes ABCmouse over charges that it unfairly billed users and made it difficult for them to cancel the service. More than 200,000 people are receiving refunds as a result of the settlement. In a high-profile 2015 case, the FTC charged DirecTV with tricking consumers into automatic charges and costly cancellation fees. But a federal judge rejected most of the agency’s arguments and the case was ultimately dismissed in 2018.

The subscription business has expanded much faster than the federal regulations that police it, though a number of states have enacted their own policies, creating an uneven set of standards across the country. The “subscription economy” will grow to $1.5 trillion by 2025, more than double what it’s worth now, according to a prediction from UBS, a financial services firm.

The FTC is trying to update rules it first put into place in 1973, and the only federal statute primarily designed to address this type of marketing was passed in 2010. Complicating matters, no one seems to know for sure how many subscriptions U.S. consumers actually have or how many of these subscriptions have locked in their customers through unfair billing practices or by making it exceedingly difficult to cancel.

The subscription model, in which a customer agrees to pay a set amount each month for a service and be automatically billed, is convenient for the consumer and a stable source of revenue for the business. Subscription-based businesses very frequently use “negative-option” billing, Kohm said. Negative-option billing is a term for the practice in which a business interprets a consumer’s silence or inaction as consent to charge them.

“A subscription doesn’t have to be a negative option, but it almost always is,” he said, based on his observations of the industry.

Regulators, law enforcement officials and consumer advocates say there can be a dark side to the practice: rampant abuse and the steady sapping of Americans’ bank accounts, often without their knowledge or consent. That’s because consumers often aren’t “billed” for the services and might only notice the charges as they come up on their debit or credit card statements.

“These deceptive practices are widespread,” said Jeff Rosen, the district attorney of Santa Clara County, Calif., whose office has brought high-profile cases against companies for automatic renewal abuses. “They are a threat to consumers.”

While many of the worst actors operate at the margins of American commerce, complaints about subscription services have been lodged even against well-known companies. In 2014, satellite radio provider Sirius XM agreed to pay $3.8 million in a settlement with 45 states and Washington, D.C., over claims that it made it difficult for customers to cancel, automatically charged them without enough disclosure, did not provide timely refunds and other complaints. In addition to the cash settlement, the company agreed to change some of its business practices.

In 2018, Apple agreed to pay $16.5 million to settle a five-year suit claiming the company had violated California law over its in-app subscription auto-renewal practices. And last year, consumers filed lawsuits against the New York Times and The Washington Post, making similar claims in each case that the newspapers’ subscription programs resulted in recurring charges without proper disclosures and authorizations and thus violated California law. Lawyers for both companies rejected those claims in court, arguing that the newspapers provided accurate information and complied with state law, and urged dismissal of the complaints.

A SiriusXM spokesman referred The Post to a 2014 statement in which it said it was pleased to reach the agreement and had already implemented changes to its practices. An Apple spokeswoman said the company denied all of the allegations in the lawsuit.

A New York Times spokesperson, Nicole Taylor, said the parties in that case reached a settlement, but with “no finding or admission of liability.”

“We are confident that our marketing and subscription practices fully comply with California law and the laws of other states,” Taylor said.

Kris Coratti, a spokeswoman for The Washington Post, said that while the paper believes “our subscription practices complied with California law at all times, we are pleased we were able to reach a mutually agreeable settlement of this matter.”

The FTC announced in 2019 that it was considering tightening its regulation of negative-option marketing. It has yet to announce any changes, but Kohm said the agency is “actively considering what its options are in this area right now.”

“Nobody themselves dies from a negative-option plan, but collectively they create conditions that lead to systemic poverty and make it more difficult for people to get through their lives,” said Chris Peterson, a law professor at the University of Utah who focuses on consumer protection issues. “This is one of those low-grade but very common problems that we are not effective in dealing with in our country right now.”

It’s difficult even for the FTC to know the true scale of the problem, which Kohm took care to define as deceptive negative-option marketing, not all negative-option marketing.

“I don’t have phenomenal data. What I do have is the FTC sense that it’s bringing a lot of cases and the sense of our law enforcement partners in the states that they are doing the same thing,” Kohm said. “Their comments would all indicate that this is, in very recent years, a growing problem.”

Consumer advocates said that although the FTC has been relatively active on the issue of negative-option abuses, its limited budget and staff, and an onerous rulemaking process, make it impossible to keep up with the growth of these marketing tactics. The negative-option policy is one of 23 FTC rules under review.

“The FTC is really, really, really understaffed,” said Ira Rheingold, executive director of the National Association of Consumer Advocates. “There are a lot of things we want the FTC to do.”

In 1979, the FTC had 1,746 full-time employees. In 2019 — after the invention of the Internet and an eightfold increase in U.S. gross domestic product — the FTC had just over 1,100 full-time staffers.

“The Commission has been quite vocal to Congress about the need for more resources for the FTC to allow us to better protect American consumers,” the FTC said in a statement provided by a spokesman.

The business lobbies opposing changes to the FTC’s negative-option rule include the News Media Alliance, a trade association made up of nearly 2,000 news outlets, including The Post. Consumer advocates said pushback by newspapers against stricter rules tends to have more heft than other businesses that use automatic renewals.

“Unlike some lobby efforts by, say, supplement companies, newspapers tend to have a better PR presence,” said Bonnie Patten, executive director of the advocacy group Truth in Advertising.

In a 2019 letter to the FTC, the News Media Alliance argued that the FTC should not take stronger steps “in the absence of clear evidence that there is a significant problem justifying governmental intervention.” It also said automatic renewals offer consumers convenience and security.

Paul Boyle, senior vice president for public policy at the News Media Alliance, pointed to strengthened merchant guidelines issued in the past year by some credit card companies. Such companies want to discourage bad practices because they are the ones that have to deal with unhappy customers trying to cancel charges. A Visa policy enacted in April 2020 applies to merchants offering free or introductory trials and requires them to notify cardholders at least a week before the expiration of a trial and provide a link “or other simple mechanism” to cancel the subscription. American Express similarly requires merchants with introductory offers to send customers a reminder in writing before the first recurring charge, with enough time to cancel.

“We believe these market-based guidelines should be given time to enhance the consumer experience rather than turning to a federally imposed standard or regulation,” Boyle said in an email, adding that increased subscriptions during the coronavirus pandemic helped cushion publishers against dramatic declines in advertising.

Chris Hoofnagle, a law professor at the University of California at Berkeley, said such policies can be very effective but are dependent on the incentives of the credit card companies, and thus are not a replacement for government action, especially as new players like tech and social media companies enter the payment space.

The Restore Online Shoppers’ Confidence Act, or ROSCA, passed in 2010, combated some abuses, such as the sharing of sensitive customer data with third parties. It also required companies that use negative-option features to provide “simple mechanisms for a consumer to stop recurring charges.” But consumer advocates say that ROSCA built in a loophole for companies by failing to define what a “simple mechanism” is. For instance, some firms allow people to sign up for subscriptions online but prohibit them from canceling their subscription online, requiring them instead to call a customer service center during specific hours.

“Companies will say, well, you can call us, but the issue is you can never get through or you’re on hold for hours,” Patten said.

Some states have taken it upon themselves to pass stronger legislation, creating a mishmash of standards across the country. One example is California, which has a state law with more specific requirements for automatic renewal deals than ROSCA, including that companies allow customers to cancel online if they signed up for a program online. A statewide task force of local district attorneys, including Rosen’s team in Santa Clara County, has been working for years to investigate violations of the law.

“We get tips and complaints all the time from consumers about these practices,” Rosen said.

Rep. Mark Takano (D-Calif.) has tried for years to create a stricter national standard. He has repeatedly introduced a bill dubbed the Unsubscribe Act, which would require companies to allow customers to cancel subscriptions in the same way in which they signed up, obtain the customer’s renewed consent before charging them after an introductory trial, and send customers periodic reminders of the terms of their subscription. The latest version of the bill has not yet been reintroduced, and Takano is trying to line up a Republican co-sponsor.

“The pandemic has really hastened us into digital commerce more than ever,” he said in an interview. “It’s precisely the kind of law that will strengthen e-commerce.”

Boyle of the News Media Alliance said his group has not taken a formal position on the legislation, though he met with Takano’s staff in 2019 to emphasize newspapers’ reliance on subscription revenue and learn about the legislation.

“We have not lobbied anyone else since that introductory meeting,” Boyle said.

The FTC acknowledged in 2019 that its current rule addressing negative-option plans is too narrow to “reach most modern negative option marketing.” It also said that the current patchwork of federal laws and regulations “do not provide industry and consumers with a consistent legal framework across different media and types of plans,” and may not be specific enough “to deter deceptive practices.”

Creating new rules is a lengthy and cumbersome process for any federal agency, requiring months of advance notice and careful consideration of outside views. But the FTC faces extra requirements, stemming from legislation passed in 1975. Those rules “represent an enormous drain on staff resources,” FTC Commissioner Rebecca Kelly Slaughter wrote in May 2020.

Five years after the FTC considered changes to the negative-option rule in 2009, it closed the review with no changes.

While the federal government has been slow to respond, certain industry practices have grown more common over the past decade. A 2019 Better Business Bureau study found that complaints to the FTC about “free trials” more than doubled between 2015 and 2017.

In December, Julie Peters, who lives in a small town in central Georgia, was browsing her social media when she saw an advertisement for a face cream that she could try for just the $6.95 shipping price. She signed up for the deal with her debit card and was sent the cream, along with an eye serum she says she did not order.

A month later, another box arrived with the same products, though she says she had not ordered a second trial. She set the box aside and figured she would get to the bottom of it soon, but for the mother of two children with a job at a local university, the chore was just one more thing on a never-ending list of things that had to get done.

She tried calling the number on the packing slip and was on hold for an hour and had to hang up. After coming back from spring break, she tried again. This time, she reached a customer service agent, who informed her that she had signed up for a subscription and was being charged $91.95 apiece each month for the creams and serums. When she looked at her debit card statement, she realized her account had been drained of more than $500 in the past three months. She provided The Post with a screenshot of her statement, showing six charges of $91.95 between January and March, as well as a photo of some of the products she received.

“I could have passed out,” she said. “Obviously I never would have agreed to be on an automatic shipment had I known each item was $91.95. They did not make that clear anywhere in their advertisement.”