If you’ve ever spent hours on the phone trying to cancel a subscription to no avail, you’re going to want to read this. This week, the U.S. Federal Trade Commission (FTC) issued its final “click-to-cancel” rule that will force businesses to make it as easy to cancel a subscription as it was to sign up. Most of the rule’s provisions will go into effect within 180 days.
The new rule prohibits sellers from misrepresenting facts, failing to clearly disclose terms before obtaining any billing information, failing to obtain your express consent before charging you, and failing to provide a simple way to cancel a subscription.
The rule will apply to a variety of programs and services, from gym memberships and delivery services to streaming subscriptions and retailer memberships. The FTC calls all these “negative option programs,” which means that they allow sellers to interpret a customer’s silence or failure to take action as acceptance of an offer. In other words, as long as you aren’t going out of your way to stop them from charging you, they can charge you.
There have been a few changes from the proposed rule, which required businesses to provide customers with annual reminders of negative option features and prohibited sellers from telling customers looking to cancel about potential plan modifications or reasons to keep their plans without asking if they want to hear about them first.
“Too often, businesses make people jump through endless hoops just to cancel a subscription,” said FTC Chair Lina M. 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.”
It ended up being a rather close vote, with the FTC approving the final rule 3-2. Commissioners Melissa Holyoak and Andrew N. Ferguson voted no.
