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FTC adopts 'click to cancel' rule to make it easier to end subscriptions, mirroring California law

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FTC adopts 'click to cancel' rule to make it easier to end subscriptions, mirroring California law

The Federal Trade Commission continued its crackdown on businesses that deceptively market and sell subscription services, adopting a rule Wednesday requiring companies to let consumers cancel a gym membership, streaming video service or other subscription as easily as they started it.

The rule expands the FTC’s restrictions on “negative option” offers, which automatically start, renew or expand a service unless a consumer takes action to stop it. Examples include free trials that convert automatically to paid subscriptions and one-year contracts that renew endlessly on their own.

Long in the works — the commission began looking into the issue in 2019 — the FTC’s rule is similar to a California “click to cancel” measure that Gov. Gavin Newsom signed into law last month. The main requirement is that subscription services allow people to cancel as simply as they signed up — for example, though an easy-to-find link online or a single phone call.

The rule also requires businesses to obtain explicit consent before signing someone up for a subscription, bars them from withholding important information or lying about the services they’re selling, and requires them to “clearly and conspicuously” disclose the terms before collecting a customer’s payment information.

As more companies and product lines have shifted from one-time payments to recurring monthly fees, more consumers have bemoaned the hurdles they have to clear to extricate themselves from the subscriptions they no longer want. The FTC said it had received nearly 70 complaints a day on average from consumers about recurring subscriptions and negative options this year, up from 42 a day in 2021.

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In an email, Lindsay Owens of the Groundwork Collaborative, an advocacy group that supports the new rule, said examples of the problems included “sitting on hold to try to cancel a subscription that you signed up for online in seconds, having to drive to the gym to cancel a subscription when you can access every other part of your account from the website, [and] having to navigate a slew of unwanted and often misleading ‘deals’ designed to keep you enrolled.”

She added, “The digital economy has made purchasing, signing up, and enrolling a breeze. Now the FTC has made a rule that consumers must be able to cancel a subscription just as seamlessly as they can enroll, without the tricks, traps, extra time and roadblocks companies have deployed deceptively for years to keep people on autopay.”

In a statement, Teresa Murray, consumer watchdog director at Public Interest Research Group, likened many subscription services and memberships to “a visit to Hotel California: ‘You can check out any time you like, but you can never leave.’” Now, she said, “You’ll be able to leave.”

Many consumers also complained about trying to cancel a service only to encounter “a never-ending phone tree or online maze that required click after click after click, only to find themselves back at the beginning.” The FTC’s new restrictions and requirements, she said, “give consumers more freedom to switch providers, read a different news service, buy a different pet food or none at all.”

The rule split the commission along partisan lines, with the three Democratic appointees in favor and two Republicans opposed. In her dissenting statement, Commissioner Melissa Holyoak said the rule not only exceeded the agency’s legal authority but also “incentivizes companies to avoid negative option features that honest businesses and consumers find valuable.” Predicting that the rule would not survive a legal challenge, she accused the commission’s chair, Lina Khan, of rushing to finalize the rule before the election to help the Democratic candidate for president, Vice President Kamala Harris.

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Unless a court intervenes, the new rule will go into effect in about six months. The new state law (Assembly Bill 2863) will kick in a few months later, applying to subscription contracts signed or renewed after July 1, 2025.

Robert Herrell of the Consumer Federation of California, which sponsored the state law, welcomed the FTC rule but noted that AB 2863 goes further. In particular, he said in an email, it includes two requirements the FTC originally proposed but dropped from the final rule: that consumers receive a reminder before a subscription automatically renews each year, and that subscribers can cancel without having to wade through multiple discount offers and other attempts to persuade them to renew.

The state law also will continue to apply to California consumers if the FTC’s new rule is enjoined by a federal judge or blocked by Congress, Herrell said.

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Toys aren't just for kids. Mattel and other companies are embracing 'kidults'

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Toys aren't just for kids. Mattel and other companies are embracing 'kidults'

Jeremy Hart played with Hot Wheels as a kid, but he eventually grew out of them, tucking the miniature cars away in a toolbox.

Then nostalgia struck when he attended the Hot Wheels convention in California with his son three years ago.

“I get these little glimmers and glimpses of memories and feelings when I look and see those Hot Wheels from my childhood,” Hart said.

Today, the 48-year-old has fully embraced his inner child. He has spent hundreds of dollars on Hot Wheels and is always on the hunt for new ones that replicate vehicles he’s owned or that were featured on TV shows he watched when he was younger, such as “The Fall Guy” and “The Dukes of Hazzard.” Hart proudly displays his collection at Dent Express, the auto body shop he started in Torrance.

Hart is part of a growing number of adults who are buying toys for themselves, reclaiming memories from their childhood and showing off their fandom on their desks and shelves. Some have managed to cash in on their obsessions, building up lucrative followings of toy fans online.

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Hot Wheels collector Jeremy Hart.

(Christina House / Los Angeles Times)

Toy companies including Mattel, the Lego Group, Hasbro and MGA Entertainment have taken note of the rise of these customers known in the industry as “kidults” and increasingly are making toys with them in mind.

Mattel President and Chief Commercial Officer Steve Totzke said that while the El Segundo-based company has long counted adults among fans of its major brands such as Hot Wheels and Barbie, sales to adults have grown over the last few years. Depending on the brand, he said, adult collectors can account for up to 25% of sales.

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“I’m just thrilled that the rest of the industry and society is catching up, because I do believe that play is essential and you should be enjoying toys and joy at all ages,” said Totzke, who has worked at Mattel for more than 20 years.

During the COVID-19 pandemic, U.S. toy companies saw sales surge as people stuck at home looked for activities to do. While overall growth has since slowed, sales to people who are at least 18 years old and buying toys for themselves are still going strong, data from market research firm Circana shows.

In the 12 months ending June 2024, U.S. adults tallied more than $7 billion in toy purchases, the figures from Circana show. Some of the top-selling toys for adults include Pokémon, Star Wars, Lego Star Wars sets, Funko Pop! and Squishmallows. From January to April, adults bought more toys than any other age group, surpassing preschoolers for the first time, according to Circana.

In the second quarter, from April to June, sales for adults ages 18 to 34 grew by 10%, while sales for ages 35 and older grew by 9% compared with the same period last year.

Azusa Sakamoto, a 42-year-old nail artist and Barbie superfan, started collecting Barbie dolls and all the accessories and decor tied to the doll when she was a teenager. Known as Azusa Barbie, Sakamoto views Barbie as more of a “fashion icon” than a toy. Some people love Chanel. She loves Barbie.

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“I just buy whatever I like, you know, whatever makes me happy,” she said. “I don’t think … age matters.”

Barbie collector Azusa Sakamoto looks at her face in a heart-shaped mirror next to shelves full of Barbies.

Barbie collector Azusa Sakamoto.

(Christina House / Los Angeles Times)

Inside her West Hollywood apartment, Sakamoto is living in a Barbie world. Rows of Barbies line pink walls. There’s a Barbie fridge, Barbie window shades and a Barbie nightstand.

Pink-haired Sakamoto said she relates to Barbie’s optimism and independence. She estimates she owns more than 600 Barbies and 300 Barbie shirts, sharing her fandom and recent purchases on social media.

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Roughly 43% of adults in the United States bought a toy for themselves in the last year, Circana found in a 2024 survey. Some of the top reasons adults said they bought toys were for socialization, enjoyment and collecting. Others responded they purchased toys to escape from reality, display in their homes or as investments.

Harrison Woodward said receiving a Lego Technic set of a model car reignited his childhood interest in the plastic building pieces that can be connected to make intricate creations.

“I was hooked after that,” he said. “I loved the sense of peace that it gives me. … They’re like 3D puzzles.”

He’s now spent close to $20,000 on Lego sets, with the majority of the purchases made within the last year. After his videos of him buying, building and showcasing Lego sets went viral on TikTok, the 26-year-old began earning payments from the social media platform; he also struck sponsorship deals with retailers and other companies.

The Arizona resident said he makes enough money from his Lego venture that he was able to quit his insurance job several months ago to create online content full-time. On TikTok and Instagram, some of his videos rack up millions of views featuring replicas of the Titanic, the Eiffel Tower and the Great Pyramid of Giza.

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Kathy Hirsh-Pasek, a professor of psychology at Temple University, said playing with toys as an adult can be beneficial, helping people foster curiosity, creativity and communication. Adults should be wary, though, if they’re buying dolls as a replacement for making friends in real life.

With people experiencing heightened feelings of loneliness, depression and anxiety while spending more time scrolling on their smartphones, it’s chipped away at social connections adults make, she said.

“They can’t be a substitute for humans,” she said. “But if these toys become a way to get humans to play with other humans again, I’m all for it.”

Juli Lennett, vice president and industry advisor, toys, for Circana, said social media has made it easy for people to find others with the same interests, making it more socially acceptable to buy toys as an adult. Some adults who question whether buying a doll house they never had as a kid is healthy behavior have found reassurance from toy enthusiasts online.

1

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Barbie collector Azusa Sakamoto.

2 Hot Wheels collector Jeremy Hart

1. Barbie collector Azusa Sakamoto. 2. Hot Wheels collector Jeremy Hart. (Christina House / Los Angeles Times)

Social media star Charli D’Amelio has shown off her Squishmallows collection on Instagram. Olympic rugby player Sammy Sullivan is a mega-fan of Lego sets. SAG-AFTRA President Fran Drescher brought a heart-shaped plushie to union bargaining sessions. When Fisher Price unveiled a Little People Collector Britney Spears set in September, blogger Perez Hilton posted “NEED this!” on X, formerly Twitter.

“There is that opportunity to really think about the audience and create more toys that we’ve never seen before for that more adult audience,” Lennett said.

On Mattel Creations, a website for collectors, adults can find limited-edition collectibles that are of higher quality than toys designed for kids.

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Several of the items on the site were listed recently as sold out, including a $300 Shogun Warriors Skeletor figure that stands more than 2 feet tall, a miniature $200 Porsche 930 in a display case modeled after a white sculpture by artist Daniel Arsham and $30 brightly colored Magic 8 balls decorated like an astronaut Barbie or a Hot Wheels race car driver.

In 2020, Mattel released a $400 remote-controlled Tesla Cybertruck with a vinyl “cracked” window sticker — a nod to when Tesla CEO Elon Musk smashed the “bulletproof” window on the car.

“There’s an aspect of designing for rarity, and then there’s also an aspect of modern play,” said Chris Down, Mattel’s chief design officer. When designing toys, Down said he and his team at Mattel ask themselves, “How are adult consumers not just playing with something the way that you would play with it as a kid but also playing all the way through to displaying?”

Mattel has partnered with artists, an Italian design company, a streetwear brand and others on toys and products. It has tapped into cultural and entertainment draws such as “Harry Potter,” Pokémon, “Wicked” and the hit television show “Breaking Bad,” creating new figurines based on their characters. The company teamed up with Formula One to build new F1-themed Hot Wheels and has released Little People NFL collector sets. The popularity of the 2023 Barbie movie, which grossed more than $1 billion at the box office, drove sales for the dolls.

Mattel reported net sales of $1.08 billion in the second quarter, down 1% compared with the same period last year. Net income surged to $57 million, more than doubling the total from the previous year.

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The Lego Group also has been embracing adult buyers, some of whom call themselves AFOLs (Adult Fan of Lego). On the Lego brand’s website, replicas of the Mona Lisa, cars, plants and more are featured online with the words “Adults Welcome.”

Genevieve Capa Cruz, senior marketing director for adults at the Lego Group, said the company expects sales for both adults and kids to grow.

“Consumer research shows that when adults are building with Lego bricks, they also tend to gift it more to the kids in their lives, and encourage building together, which makes it an even more enjoyable activity for everyone in the family,” she said in a statement.

Other toy companies also have been attracting adult buyers, offering them ways to customize their toys.

MGA Entertainment, the Los Angeles-based company that makes Bratz dolls, sells mini do-it-yourself collectible sets, including one in which fans can make their own wizarding potions from “Harry Potter” or weapons from “The Lord of the Rings.” The company’s Miniverse collection also offers the chance for adults (21 and over, please) to make mini cocktails.

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“People love the detail that goes in the toy. It’s like collecting a piece of art,” said Isaac Larian, founder and chief executive of MGA Entertainment.

Adults make up around 15% to 20% of the company’s sales, he said. Those between the ages of 18 and 35 represent the company’s “sweet spot,” but its consumers also can be older. MGA currently is promoting a Kylie Jenner Bratz doll, and it started releasing dolls based on characters from the “Mean Girls” films this month. Both are targeted at young adults.

Hot Wheel collectors like Hart plan to purchase more toys in the future.

“It’ll probably be never-ending for me,” he said. “Once I move up to the next size display case, I’m gonna have a bunch of real estate to fill.”

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Phillips 66 will shut historic Wilmington-area refinery complex

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Phillips 66 will shut historic Wilmington-area refinery complex

Phillips 66 announced Wednesday that it will shut its historic Wilmington-area oil refinery complex but will work with the state to continue supplying fuel to consumers.

The refinery near the Port of Los Angeles will cease operations in the fourth quarter of 2025, with the company saying it will replace its output with sources “inside and outside its refining network” and with renewable diesel and sustainable aviation fuels from a San Francisco Bay-area complex. The refinery contributes about 8% of the state’s gasoline supply.

“Phillips 66 remains committed to serving California and will continue to take the necessary steps to meet our commercial and customer demands,” said Mark Lashier, chairman and chief executive of Phillips 66. “We understand this decision has an impact on our employees, contractors and the broader community. We will work to help and support them through this transition.”

About 600 employees and 300 contractors currently operate the refinery, the company said.

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The refinery complex consists of two facilities linked by pipeline located five miles apart in Wilmington and Carson, about 15 miles southeast of Los Angeles. The Carson facility was built in 1923 and the Wilmington facility was built in 1919, according to the company’s website.

“There’s no question we are going to lose refineries over time, because demand is going to go down as we transition to electric vehicles, but I did not expect to see any of them exiting this quickly,” said Severin Borenstein, faculty director of the Energy Institute at UC Berkeley’s Haas School of Business.

California “over the medium term” will now have to rely more on imports, he said. “I think part of the response the state’s going to need to consider is how to make sure that we can import sufficient gasoline to meet our needs.”

In announcing the closure, Phillips 66 said that the “long-term sustainability of our Los Angeles Refinery” was “uncertain and affected by market dynamics.” However, the closure immediately became a political football, with Republicans and gas station operators blaming the policies of California Gov. Gavin Newsom.

The announcement comes the same week the governor signed a new state law that allows the state to require oil refiners to maintain a minimum inventory of fuel to avoid supply shortages that create higher gasoline prices. It also authorizes the California Energy Commission to require refiners to plan for resupply during refiner maintenance outages.

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“Thanks to Gavin Newsom’s showboating and incompetence, hundreds of workers will lose their jobs while California drivers will face a massive price hike,” Assembly Republican Leader James Gallagher of Yuba City said in a statement. “Great work, Gavin.”

The California Fuels and Convenience Alliance, an industry trade group representing fuel marketers, gas station owners and others, directly blamed the legislation.

“Unfortunately, the announcement today is not much of a surprise, as we continually warned the Legislature and Administration about how ABX2-1 would negatively impact supply,” said Alessandra Magnasco, the alliance’s governmental affairs and regulatory director. “This is exactly what happens when our leaders are more concerned with political theater than solving real problems.”

The association blamed higher gas prices on “exploding overhead costs to run our stations, costly environmental regulations.”

However, a spokesperson for Phillips 66 told Politico the announcement was not in response to Newsom’s signing the law.

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The governor’s office referred questions to the California Energy Commission.

“The company has committed to minimizing impacts on Californians while they continue to meet fuel demands, maintain reliable supplies, and ensure they take necessary steps to fulfill both commercial and customer needs,” California Energy Commission Vice Chair Siva Gunda said in a statement.

Phillips 66 said it has has engaged Catellus Development Corp. and Deca Cos. to examine future uses for the 650-acre site.

“Historically, the South Bay industrial real estate market has been extremely tight and this will allow a ton of new inventory and capacity that should help the market by providing more warehouse and distribution space” around the Port of Los Angeles, said real estate broker Mike Condon Jr. of Cushman & Wakefield, who helped manage the process of selecting a development partner for Phillips 66.

The company, based in Houston, also has been the subject of controversy over its role in climate change, leading to calls for the removal of its iconic “76” sign at Dodger Stadium.

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In the second quarter, Phillips 66 posted net income of $1.02 billion, down 40% from the same period a year ago. Shares have dropped 17% in the last six months. They closed Wednesday at $132.31, up nearly 1%.

Times staff writer Roger Vincent contributed to this report.

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Hollywood production falls below strike levels as reality TV takes massive hit

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Hollywood production falls below strike levels as reality TV takes massive hit

Hollywood production was even slower this summer than it was during last year’s strikes because of a staggering decline in reality TV shoots, according to a new report.

Overall production levels were down 5% in the third quarter of 2024 compared with the same stretch in 2023, per data released Wednesday by FilmLA, a nonprofit organization that tracks on-location shoot days in the Greater Los Angeles area. FilmLA logged 5,048 total shoot days from July 1 to Sept. 30, making this the weakest quarter of 2024 so far.

The hardest-hit sector was reality TV, which wasn’t as badly affected by the walkouts because most unscripted projects were not struck; at the same time, scripted production came to a near standstill last summer. During the third quarter of 2024, however, reality TV production plummeted by 56.3% to 946 shoot days compared with the same period in 2023.

Scripted TV production rose to 758 shoot days by the end of the third quarter while still lagging 55.5% behind the five-year average. Feature film production was up 26.6% from last year with 476 shoot days in the third quarter, which is 48% lower than the five-year average.

Commercial production during the third quarter of 2024, with 814 shoot days logged, was 7.4% higher than last year and 32.6% lower than the five-year average.

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All forms of production have been sluggish to rebound amid an ongoing industry contraction that predates the 2023 writers’ and actors’ strikes.

“Only a few months ago, the industry hoped we’d see an overall on-paper gain in the third quarter, due to the strike effect,” FilmLA President Paul Audley said in a statement. “Instead, we saw a pullback and loss of forward momentum, heading into the fall season that will make or break the year.”

Audley once again used FilmLA’s latest update as an opportunity to call for an expansion of California’s film and TV tax credit program — which industry experts and insiders overwhelmingly agree is not generous enough to compete with incentives offered by other states and countries.

Earlier this month, FilmLA reported that California’s share of the global production market fell from 22% to 18% judging by the amount of homegrown projects released in 2022 versus 2023.

In a recent interview, Audley recommended that California’s tax credit program be expanded to cover commercials, animation and reality TV production.

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“California’s film incentive is a proven jobs creator that studies show provides a net positive return on every allocated dollar,” Audley said Wednesday in a statement.

“What the program lacks is funding and eligibility criteria that reflect the outputs of the industry in 2024. … just as our competitors continue to innovate, California must do the same.”

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