The Federal Trade Commission today announced its new “click to cancel” rule, which will make it as easy to cancel a subscription as it was to sign up.
Getting out of subscriptions is notoriously annoying, usually taking much more effort than it took to join. From media subscriptions to gym memberships to cable TV services, the whole process of subscribing can feel like you’ve been locked into a product.
The FTC said it receives about 70 complaints every day from Americans who cannot get out of their subscription, up from 42 a year in 2021. This should now be a thing of the past thanks to the “click to cancel” rule, passed on a 3-2 vote.
“Too often, businesses make people jump through endless hoops just to cancel a subscription,” said Commission Chair Lina Khan. “The FTC’s rule will end these tricks and traps, saving Americans time and money. Nobody should be stuck paying for a service they no longer want.”
This will mean that for whatever subscription you have, there will be a clear option to cancel your membership in one click, not hidden somewhere in an inscrutable services menu. If the subscription was managed over the phone, one call should be enough with no questions asked to end it.
The rule also demands that companies be more transparent about their products, future costs, plans and deadlines. Customers will now need to be informed about what exactly they’re getting into.
Last year, the FTC sued Amazon.com Inc. for what it said was the company’s deceptive practices when it “tricked” consumers by trapping them in recurring Prime subscriptions and making it Kafkaesque to get out of them. This year, the U.S. Department of Justice sued Adobe Inc. for a similar practice regarding its software products.
No doubt consumers will be glad to hear the FTC is finally doing something about pesky subscriptions. However, the U.S. Chamber of Commerce is not so positive, today calling the click-to-cancel rule an attempt to “micromanage business decisions.” The group believes it will only increase costs for consumers.
The rule will take effect in 180 days after it is published in the government’s daily compendium of public notices, the Federal Register.