New FTC Rule Could Make Canceling Subscriptions Easier

BY Sriansh

Published 23 Mar 2023

FTC Building

The Federal Trade Commission (FTC) has proposed new rules that will make it easier for consumers to cancel recurring subscriptions and memberships.

Currently, there is no standard way of canceling a subscription. While Apple offers an easy way of canceling its subscriptions, such as Apple Music and Apple TV+, consumers more often than not, have to follow lengthy, multi-step processes on other websites and services to cancel a subscription successfully.

FTC wants to change this and has proposed new rules that would provide consumers with a consistent legal framework that ensures businesses make it easy for customers to cancel their subscriptions. The “Click to Cancel” provisions would ensure that businesses make it at least as easy to cancel a subscription as it is to start.

This means that if a consumer can sign up online, they must be able to cancel it on the same website in the same number of steps. The proposed rule would also require companies to provide complete and clear information on canceling recurring subscriptions.

The “Click to Cancel” rule would also require sellers to provide an annual reminder to consumers before they are automatically renewed. Additionally, the rule would allow sellers to pitch additional offers or modifications when a consumer tries to cancel their enrollment. However, before making such pitches, sellers must ask consumers whether they want to hear them.

FTC Chair Lina M. Khan believes that the proposed rule would save consumers time and money and prevent businesses from tricking consumers into paying for subscriptions they no longer want or didn’t sign up for in the first place. The rule is part of the FTC’s review of the 1973 Negative Option Rule.

Source: FTC