FTC rule seeks to make it easier to cancel subscriptions

The Federal Trade Commission announced Wednesday, Oct. 16, its final “click-to-cancel” rule , targeting businesses that make it difficult for customers to cancel subscriptions and memberships. The rule requires retailers, streaming services, gyms and other subscription-based sellers to “make it as easy for consumers to cancel their enrollment as it was to sign up.”

In March 2023, the FTC announced its “click-to-cancel” rule proposals. That announcement resulted in 16,000 comments including from consumers who vented their frustrations over navigating through companies’ cancellation processes. The FTC said this year it receives approximately 70 complaints a day about these types of practices — up from 42 last year.

The comments, especially from retail trade groups, did however lead the FTC to make some changes to its initial rule proposals. It dropped a requirement that businesses remind consumers every year about their subscriptions renewing. Another would have allowed consumers looking to cancel service to opt out of seeing the business’ last ditch offers and discounts trying to change their minds.

The "click-to-cancel" rule also takes into account how a person signs up for a service. If someone signs up online, they would be able to click a button online to cancel and not have to deal with a chatbot or agent. And if they sign up in person, they can still cancel online or over the phone.

In a press release Wednesday, Commission Chair Lina Khan said, “Too often, businesses make people jump through endless hoops just to cancel a subscription. 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.”

In a statement to Straight Arrow News, the FTC said the final rule will go into effect 180 days after being published in the federal register. However, the FTC told SAN it does not know yet when that will happen.

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