In today’s tech-driven world, everything comes with a subscription. Do you want to watch a show? Subscribe to Netflix. Do you want to read the news? Subscribe to The New York Times. Do you want to play your favorite song or work as a graphic designer? You better have Spotify Premium and a subscription to the Adobe Suite.
The US Federal Trade Commission (FTC) is, however, now introducing the click-to-cancel rule requiring businesses to make canceling a subscription as easy as signing up for it.
Subscribing to services is easy (and expensive), but subscription cancellations are a whole other issue.
Users can no longer be forced to cancel a subscription through a different method
If you use any subscription-based services, you know that canceling them when you no longer want to use them is almost an odyssey. You have to go through various pages of “Are you sure you want to cancel?” and countless menus.
Now, under the FTC’s click-to-cancel rule, if a user signs up for a subscription with an online form, companies cannot require the user to call them or chat with customer service to cancel the subscription. In other words, canceling a subscription will have to be as easy as subscribing to it was, according to the new FTC ruling.
This new rule will also force businesses to clearly disclose the terms of their subscriptions and get user consent before subscribers are actually charged.
The FTC’s click-to-cancel rule was proposed last year
This new rule to improve subscription services for users was proposed last year and includes any subscription that automatically renews. This means that the FTC’s click-to-cancel rule includes services like gym memberships, magazine subscriptions, and Amazon Prime.
The ruling also includes things like free trials that automatically charge if you don’t cancel them, alongside continuity plans where you’ll receive periodic products until you cancel the subscription.
NEW: The FTC has finalized its “Click to Cancel” rule – which will require companies to make it as easy to cancel a subscription as it is to sign up.
Unwanted subscriptions add up for Americans, and our Administration is taking action to save families time and money. pic.twitter.com/wdIcKac6PN
— The White House (@WhiteHouse) October 16, 2024
In a press release, the FTC’s 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,” Khan said. “Nobody should be stuck paying for a service they no longer want.”
The FTC has set its eyes on subscription services and their shady practices
The FTC’s click-to-cancel rule is part of a broader strategy to stop online services from engaging in shady practices. For instance, earlier in 2024, the FTC sued Adobe “for offering deceiving subscriptions” that are borderline impossible to cancel.
The agency also sued tech giant Amazon over claims it essentially tricked people into subscribing to Amazon Prime. The FTC’s click-to-cancel rule will be enacted 180 days after it is published in the Federal Register.
