Canceling a subscription to an app or streaming service: what the law says, and how it differs from a gym

Service page: Consumer claims and class actions lawyer.

You canceled an app subscription and the charges continue: what does the law say?

A subscription to an app or a streaming service is a continuing transaction: a transaction to buy services on an ongoing basis, whether for a fixed period or for an unlimited period (section 13C(a) of the Consumer Protection Law, 5741-1981). Once you have given a cancellation notice in one of the ways listed in section 14I(a), the contract ends within three business days. If the notice was sent by registered mail, it ends within six business days from the day it was handed in for sending, unless you stated a later date in the notice. On the cancellation date the dealer stops the service, and it may not charge for service provided after it (section 13D(c)).

You can demand back a charge for the period after the cancellation date. Continuing to charge after a cancellation notice in a continuing transaction, contrary to section 13D(c), is also a violation for which the court may award exemplary damages without proof of damage (section 31A(a)(2b)). Before such a claim, a written request is required. For this violation, the cancellation notice is enough, as long as it was not given only orally (section 31A(b)). The full steps, in order: Charged after subscription cancellation? 5 steps to get a refund.

You signed up through the app store or directly with the service: where do you cancel?

The Consumer Protection Law does not mention app stores. Its duties are placed on a “dealer”: a person who sells an asset or provides a service in the course of business (section 1). Who the dealer is in a transaction made through a store depends on the terms of the contract. What the Law does set for the dealer you contracted with:

• Online cancellation: in a transaction that can be made online, the dealer must also allow cancellation online (section 14I(a)(5)). It must place a dedicated link for sending a cancellation notice on the home page of its website, in a prominent and clear place (section 14I(b)).
• Disclosing the ways to cancel: the dealer must disclose to you in writing the ways to give a cancellation notice and the contact details for each way, no later than the time the service is supplied (section 14I(d)). It must also do so on the invoice, receipt or payment notice it sends (section 14I(e)(1)).
• What to write: in the cancellation notice, state your name and ID number (section 14I(c)).

In practice: check who appears as the charging party in your credit card statement and on the receipt, and cancel through the channel listed there. Did you sign up through the app store? Make sure the subscription is marked as canceled in the store too, and keep a screenshot of the cancellation confirmation and its date. Deleting the app from your phone on its own is not a cancellation notice under section 14I(a). Does the charge go through a standing order from your bank account? See Canceling the debit authorization at the bank.

What is the same in both cases, and what is different

A gym membership and a subscription to an app or a streaming service are both a continuing transaction as defined in section 13C(a) of the Consumer Protection Law, 5741-1981: a transaction to buy goods or services on an ongoing basis, whether for a fixed period or for an unlimited period. So the same basis applies to both: the cancellation channels of section 14I, the requirement to state your name and ID number, and the rule in section 13D(c). Under that rule, the contract ends within three business days from when the notice is given (six by registered mail), and no charge may be made for service provided after the cancellation date.

From here on the paths split. A membership at a gym is subject to a dedicated layer: section 13A1 and the Fourth Schedule to the Law. A digital subscription is usually subject to the distance sale layer: section 14C. The two layers differ in deadlines, in cancellation fees and in how refunds are made.

A digital subscription: the right to cancel a distance sale (section 14C)

A subscription to an app, a streaming service or software is almost always bought without the parties being present together, after an approach by electronic communication. So it is a distance sale as defined in section 14C(f). The right to cancel a service is set in section 14C(c)(2): the consumer may cancel within fourteen days from the day the transaction was made or from the day the document with the details in section 14C(b) was received, whichever is later. In a continuing transaction, this applies whether or not the service has started. In a transaction that is not continuing, it applies provided the cancellation is made at least two days, not counting rest days, before the time the service is due to be provided.

Note that the count starts from the later of the two dates. The document under section 14C(b) includes, among other things, the price of the service, the way the consumer can use the right to cancel, and the terms that apply to the transaction. A dealer that did not give this document has not started the fourteen-day period.

Alongside this, you should know section 14C(d), which excludes several types of distance sales from the right to cancel. Among them: perishable goods; accommodation, travel, vacation or leisure services, if the cancellation takes effect within seven days that are not rest days before the service is provided; “information” as defined in the Computers Law, 5755-1995; goods made specially for the consumer; and goods that can be recorded, reproduced or copied whose original packaging the consumer has opened. These exceptions require examining the specific transaction individually, and no sweeping conclusion should be drawn from them about every digital subscription.

A point worth knowing: section 14C1(c) extends the cancellation window to four months in a distance sale made with a consumer who is a person with a disability, a senior citizen (a person aged 65 or over) or a new immigrant (a person for whom five years have not yet passed since receiving an immigrant certificate). This applies provided the contract included a conversation between the dealer and the consumer, including by electronic communication.

Cancellation fee: the ceiling in section 14E

Section 14E distinguishes between two types of cancellation, and this distinction decides how much money comes back to you:

• Cancellation because of a defect, a non-conformity, a failure to supply on time or any other breach of the contract by the dealer (section 14E(a)): the dealer must refund the consumer, within 14 days from the day it received the cancellation notice, the part of the transaction price that was paid. It must cancel the charge, give the consumer a copy of the notice canceling the charge, and may not charge any cancellation fee.
• Cancellation not for these reasons (section 14E(b)): the same duty to refund within 14 days, but the dealer may charge a cancellation fee of no more than 5% of the price of the asset that is the subject of the contract or transaction, or 100 new shekels, whichever is lower.

Two important additions. Section 14E(b1): when a continuing transaction under which the service has already started is canceled under section 14C(c) or 14C1(c), the consumer pays the proportional payment for the service they received. And section 14E(d): a “cancellation fee” includes expenses or obligations for shipping, packaging or any other expense that the dealer claims it incurred because of the contract or its cancellation. In other words, a “handling fee” cannot be added above the ceiling. (Section 14E(b2) allows a separate payment for the costs of installing goods in the consumer’s home, of no more than NIS 100.)

A numerical example: canceling a subscription to an annual streaming service within the 14 days

The example is for illustration only, and its numbers are imaginary. An annual subscription to a streaming service bought on a website and paid in advance: NIS 365, that is, NIS 1 a day. The document under section 14C(b) was given on the day of sign-up, and the subscription was canceled on day 10, not because of a defect or a breach by the dealer (section 14C(c)(2)). The example assumes that the transaction does not fall under the exceptions in section 14C(d).

• Cancellation fee: the lower of 5% of the price (NIS 18.25) and NIS 100, that is, NIS 18.25 (section 14E(b)(1)).
• Proportional payment for the service provided (section 14E(b1)); if calculated by days: 10 × 1 = NIS 10.
• The refund: 365 − 18.25 − 10 = NIS 336.75, within 14 days from the day the cancellation notice was received (section 14E(b)(1)).

If the cancellation had been because of a defect or a breach by the dealer, no cancellation fee would have been charged (section 14E(a)(1)), and the refund would have been NIS 355. And if the subscription had cost NIS 2,400, 5% would have been NIS 120, so the cancellation fee would have been limited to NIS 100.

A fixed-term membership at a gym is subject to section 13A1 and item 2 of the Fourth Schedule: cancellation in writing at any time, taking effect at the end of a month, and a cancellation fee capped at 25%, 20% or 17% of the payment, depending on the third of the period in which you cancel. The details, including the alternative-plan formula: Gym subscription cancellation: consumer rights.

The comparison in one line each

• When you can cancel: gym: at any time. Digital subscription: the special right to cancel a distance sale is 14 days from the later of making the transaction and receiving the document. Beyond that, the right to cancel a continuing transaction is available to the consumer at any time.
• In which way: gym: in writing (item 2 of the Fourth Schedule). Digital subscription: through any of the channels in section 14I(a).
• When it takes effect: gym (fixed-term membership): at the end of a month from when the notice is given. A continuing transaction as a rule: three business days, or six by registered mail (section 13D(c)).
• What canceling costs: gym: the alternative-plan formula, capped at 25%/20%/17% of the payment depending on the third of the period, and no more than the payment for the rest of the period. A distance sale not because of a breach: up to 5% or NIS 100, whichever is lower.
• How soon money is refunded: in a distance sale: 14 days from receiving the notice (section 14E). At a gym: refund of the payment or cancellation of the charge, minus the proportional part and the cancellation fee.

What happens when no refund is made

Both regimes have an equally strong remedy. Section 31A(a)(4) gives exemplary damages when a consumer asked for a refund or for a charge to be canceled under section 14E(a)(1) or 14E(b)(1) after canceling a distance sale under section 14C(c) or 14C1(c), and the dealer did not refund or cancel the charge. Section 31A(a)(2b) gives exemplary damages when a dealer kept charging after a cancellation notice in a continuing transaction, contrary to section 13D(c). In both cases: up to NIS 10,000, and up to NIS 50,000 for a repeated or continuing violation or in aggravated circumstances (section 31A(c)), subject to the precondition in section 31A(b).

Further reading: Charged after subscription cancellation? 5 steps to get a refund, Subscription cancellation checklist and notice text, Cooling-off period and cancellation of a transaction and Consumer rights when shopping online. For businesses in the digital field, see Digital commerce and AI; for consumers, the subscription cancellation page and the class actions and consumer claims practice area.

Frequently asked questions

I canceled a streaming subscription and the charges continued. What do I do? The contract in a continuing transaction ends within 3 business days from when the cancellation notice is given, or 6 business days by registered mail, and from then no charge may be made (section 13D(c) of the Consumer Protection Law). Demand in writing a refund of what was collected for the period after that date. If the charge continues, the court may also award exemplary damages without proof of damage (section 31A(a)(2b)).

I deleted the app. Does that count as cancellation? No. Deleting the app on its own is not a cancellation notice under section 14I(a) of the Consumer Protection Law, so it does not end the transaction under section 13D(c). You must give the dealer a cancellation notice in one of the ways set by law, for example online or by email, and keep a confirmation.

What is the main difference between a gym membership cancellation and an app subscription cancellation? The additional layer that applies to each. A gym membership is governed by item 2 of the Fourth Schedule to the Law: cancellation in writing at any time, taking effect at the end of a month from when the notice is given, and a tiered cancellation fee capped at 25%/20%/17% of the payment. A digital subscription is usually a distance sale: a 14-day right to cancel under section 14C(c) (subject to the exceptions in section 14C(d)), a refund within 14 days, and a cancellation fee of up to 5% or NIS 100, whichever is lower.

How much of a cancellation fee may I be charged for a streaming subscription cancellation? When a distance sale is canceled not because of a defect or a breach by the dealer: up to 5% of the transaction price or NIS 100, whichever is lower (section 14E(b)(1)). If the cancellation was because of a defect, a non-conformity, a failure to supply on time or another breach of the contract by the dealer, no cancellation fee may be charged at all (section 14E(a)(1)). The cancellation fee also includes shipping and packaging expenses or any other expense the dealer claims (section 14E(d)).

More than 14 days have passed since I signed up for the app. Have I missed my chance? Not necessarily. First, the 14-day count for a service starts from the later of the day the transaction was made and the day the document in section 14C(b) was received. If the document was not given, the count has not started. Second, the right to cancel a continuing transaction is available to you at any time: the contract ends within three business days from when the notice is given under section 13D(c), and no charge may be made for service provided after that.

I canceled my gym membership: why am I still being charged for another month? Because under item 2 of the Fourth Schedule to the Law, canceling a subscription for a fixed term at a gym takes effect at the end of a month from the date the cancellation notice was given. During this period, the dealer may charge the proportional part of the payment for the right of use until the cancellation takes effect. Beyond that, it may charge only a cancellation fee, subject to the formula and the ceilings in the Schedule.

Does a swimming pool or a health club count as a gym for cancellation purposes? The definition in the Fourth Schedule is broad. Beyond the definition in the Fitness Institutes (Licensing and Supervision) Law, 5754-1994 (חוק מכוני כושר (רישוי ופיקוח), התשנ״ד-1994), it also includes a place that provides sports services or health club services, including swimming pool services, gymnastics and body-shaping exercises, a steam bath or a whirlpool bath. Excluded are a class based on a curriculum that cannot be joined at a later date, and a place that provides only swimming pool services and operates for up to five months a year.

I am over 65: do I have more time to cancel? In a distance sale, yes. Section 14C1(c) allows a person with a disability, a senior citizen (a person aged 65 or over) and a new immigrant (a person for whom five years have not yet passed since receiving an immigrant certificate) to cancel within four months. This applies provided the contract included a conversation between the dealer and the consumer, including by electronic communication. The dealer may ask to see a suitable certificate, and no other proof.